Airtel supplier Tejas Networks multiplied by six before PLI approval
- The company’s shares have generated returns of 546% in the past year due to an increase in demand for broadband services in homes and businesses.
- Tejas Networks designs, develops and sells high performance networking products to telecommunications service providers, Internet service providers, utilities, defense and government entities in more than 75 countries.
- The company, which is awaiting government approval for its demand for production-related incentives, has gained more than 15% in the past five days alone.
Faced with the growing demand for Internet services and the growing trend in data consumption, Tejas Networks, the manufacturer of optical networking products for telecommunications and Internet service providers, has provided investors with multiple returns over the course of the last year.
Over the past year, due to pandemic and remote working scenarios around the world, investors have spotted an opportunity in this space, which is why the actions of the Bengaluru-based broadband service provider have jumped 546% in the past year.
The company – where renowned investor Vijay Kedia owns 1.18% of the capital â – awaiting government approval for its demand for production-related incentives has gained more than 15% in the past five days only.
Tejas Networks designs, develops and sells high performance networking products to telecommunications service providers, Internet service providers, utilities, defense and government entities in more than 75 countries.
In January 2021, there were 4.66 billion active internet users worldwide, or 59.5% of the world’s population, according to Statista. This shows the vast opportunities in Internet services for these players.
In addition, Tejas provides products to the Indian Government’s BharatNet Project to provide high speed internet access to all Indian Gram Panchayats and has helped connect 40,000 villages so far.
Deployment of 5G places strong orders for Tejas Networks
The government’s plan to roll out 5G in the country has given the company’s departments visibility as Tata Sons neared its stake in the company this year. In July, Panatone Finvest, a subsidiary of Tata Sons, announced that it would buy 69% of the company’s capital with an investment of 1,884 crore.
The company will use the capital injection by Tata Sons to invest in research and development, sales and marketing, people, infrastructure and to improve its manufacturing and operational capabilities to meet this great market opportunity and for other general purposes. Tejas Networks sees a huge opportunity in the telecommunications sector both in India and in global markets with the new round of investments in the deployment of 5G and fiber optic broadband.
In addition, the telecommunications operator Bharti Airtel has selected the manufacturer of telecommunications equipment to expand the capacity of its optical network in the main metropolitan markets. Bharti Airtel has expanded its network capacity as part of its 5G readiness while responding to increasing consumer data usage.
Analysts expect strong future growth for the company due to a good order book and continued demand for broadband services. “A strong order book of 6.79 billion euros provides revenue visibility for calendar year 2022,” said a report from Axis Capital.
âFourth quarter (January-March 2021) revenue was a positive surprise as it grew better than expected. Revenue may remain uneven in the first quarter of fiscal 22 due to the impact of COVID and government activity muted. However, we expect it to resume during the year, as international trade gains momentum after COVID. The company is also expected to benefit from domestic broadband demand and professional, the expansion of metropolitan capacity, modernization of the network and critical infrastructure, âthe report added.
Approval in the PLI scheme to add wings to the company
As the government tries to promote local manufacturing of telecommunications equipment through the Production Linked Incentive Program (PLI), companies like Tejas Networks, Sterlite Technologies, etc., are expected to benefit.
Apparently, restrictions on Chinese suppliers such as Huawei in India and many developed countries including the United States, United Kingdom and the European Union, due to security concerns, have opened the door for companies such as Tejas to win business for profitable equipment and software. solutions.
Tejas has filed for PLI in the telecommunications equipment category, the company said in its latest investor appeal.
The government has so far approved a 12,195 crore PLI program for the manufacture of telecommunications equipment in India.
The PLI program for telecommunications equipment will cover the manufacture of equipment such as basic transmission products, 4G, 5G radio access networks and other wireless equipment. Under the PLI program for telecommunications equipment, the government will offer a 4 to 6 percent incentive to qualifying businesses on additional sales of manufactured goods for five years.
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