Tata Group telecom major receives PLI incentives worth ₹123.4 crore for FY24, stock sheds 44% YTD: Buy or sell?

Tejas Networks announced on Thursday, March 14, that the telecom major has received ₹123.45 crore as an incentive for the current fiscal 2023-23 (FY24) under the government's production-linked incentive (PLI) scheme for telecom and networking products. The Tata-Group company reported a net profit of ₹166 crore in the October-December quarter of the current fiscal.

“We would like to inform you that Tejas Networks Ltd has, on March 12, received an amount of Rs.123.45 crore from the Ministry of Communications, Department of Telecommunications - New Delhi, towards incentive for the financial year 2023-24 under the PLI Scheme for Telecom and Networking Products,” said Tejas Networks in a regulatory filing to the stock exchanges today.

Also Read: Govt disburses ₹1,596 crore in six PLI schemes during Apr-Sep this fiscal

Tejas Networks Q3 Results

Tejas Networks reported a net profit of ₹166 crore for the third quarter ended December 2024 (Q3FY25), compared to ₹275 crore in Q2FY25, a 40 per cent quarter-on-quarter decline. The telecom equipment and accessories company had posted a loss of ₹45 crore in the year-ago quarter.

Revenue from sales and services jumped 4.5 times to ₹2,497 crore from ₹560 crore in the previous year's quarter. However, it declined from ₹2,655 crore in the previous quarter of the current fiscal. Tejas Networks had an order book of ₹2,681 crore at the end of Q3FY25, compared to ₹4,845 crore in Q2FY25.

Also Read: India’s PLI schemes to boost revenue of 720 companies by USD 459 billion over next 5 years: Goldman Sachs

The company focuses on several key opportunities across the wireless and wireline segments. In the wireless sector, it is poised to benefit from the expansion of BSNL’s 4G network and the subsequent upgrade to 5G. It targets projects such as the Indian Railways' Kavach system, a collision avoidance technology, and private 5G applications for large enterprises in India.

Tejas Networks is a part of the Tata Group of companies, with Panatone Finvest (a subsidiary of Tata Sons) being the majority shareholder. The telecom firm designs and manufactures high-performance wireline and wireless networking products for telecommunications, internet service providers, utilities, defence, and government entities in over 75 countries.

Also Read: Govt launches updated PLI for speciality steel after disappointing response to previous scheme

Tejas Networks Share Price Trend

On Thursday, shares of Tejas Networks opened at ₹678.65 and dropped 3.62 per cent to hit an intra day low of ₹658 before settling 2.37 per cent lower at ₹660.15 apiece on the BSE. Tejas Networks has awarded multi-bagger returns to investors with 1,369 per cent in the last five years. However, shares have dropped around seven per cent in one year, 43 per cent year-to-date, 48.25 per cent in six months, and 15.6 per cent in one month.

Tejas Networks Stock: Should you buy or sell?

Domestic brokerage Ventura Securities gave a ‘buy’ rating on Tejas Networks with a target price of ₹1,850 and eyes a potential upside of 45.1 per cent. Consensus Share also gave a ‘buy’ rating on the stock at a target price of ₹1,100 and eyes a potential upside of 66.73 per cent from the current levels.

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts, consider individual risk tolerance, and conduct thorough research before making investment decisions, as market conditions can change rapidly, and individual circumstances may vary.