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Indian Company Investor Calls

Tejas Bullish on BSNL Add-On, Expects Receivables Cleared This Quarter

August 3, 2026 9 mins read Firehose Gupta

Tejas Networks Limited — Q1 FY27 Earnings Call (held July 28, 2026)

1. Overall Tone of Management

Optimistic. Management repeatedly emphasizes “encouraging sign,” “very bullish,” “positive trajectory,” and highlights new international wins (Europe 5G radios; South America end-to-end 5G deployment) plus improving financial/balance-sheet items (inventory down, cash up). They also frame BSNL add-on as “in the final stages” and “probably in this quarter,” and connect this to working-capital normalization and profitability.

2. Key Themes from Management Commentary

  • International wireless traction is accelerating
  • Q1 revenue driven by international shipments of 5G radios (Europe) and first commercial end-to-end 5G network deployment win in South America (radios + baseband + core).

  • Joint R&D with a global Tier-1 telco (NEC partnership referenced) positioned as a credibility/scale lever for future shipments.

  • Domestic wireline momentum continues

  • Optical + FTTx shipments to Tier-1 Indian telcos; expanded FTTx footprint for pan-India residential broadband.

  • Continued DWDM wins for enterprise/hyperscaler connectivity and Africa wholesale bandwidth provider expansion.

  • BSNL add-on order is the near-term working-capital catalyst

  • Management says the BSNL 4G expansion order for 26,000 sites is in “final stages,” with expectation to materialize very soon, probably in this quarter.

  • They link this to clearing receivables and reducing working capital and inventory built from advanced procurement.

  • AI-driven network build-out narrative

  • CTO argues AI increases traffic “20x,” driving optical build-out (aggregation/metro/core) and future higher-capacity WDM (up to 1.2–1.6T wavelengths), plus evolution of PON and wireless toward 5G-Advanced/6G.

  • Emphasis on Tejas’ R&D investment as enabling products for AI infrastructure.

  • R&D/IP remains a core strategy

  • Q1: 46 patents filed, global count 722 (with 380 granted).
  • Product roadmap tied to commercialization via trials/field trials (e.g., D2M broadcast radio trials completed; TJ1600-D3 DCI product finalist recognition).

3. Q&A Analysis

Theme A: BSNL add-on order timing, receivables, and working capital

  • Core questions
  • Will BSNL add-on order receipt/acceptance tests lead to receivables improvement?
  • Is DSO/collection cycle still elongated?
  • Any risk of inventory write-offs if BSNL delays again?
  • Management response
  • Acceptance tests/pending features are “in a very advanced stage” and they expect BSNL receivables to get cleared during the quarter.
  • For collections: they reiterate that receivables rise partly due to increased shipments going into AR; BSNL add-on is expected to help clean up inventory/receivables.
  • On DSO: they imply add-on POs should have faster delivery/acceptance than the original order (earlier calls), and in this call they again connect add-on to working-capital improvement.
  • Evasive/partial elements
  • No quantitative BSNL receivable reduction or explicit DSO target; “during the quarter” is qualitative.
  • They do not quantify how much of the AR increase is BSNL vs non-BSNL beyond general explanations.

Theme B: International order economics (performance-linked vs standard terms) and payment cycle

  • Core questions
  • Are international orders performance-linked like BSNL?
  • What is the payment cycle (e.g., 60–90 days)?
  • Management response
  • No performance-linked conditions for international orders; orders came after POC, so “products were already proven.”
  • Payment cycle is standard, “varies between 60 to 90 days.”
  • Notable strength
  • Clear differentiation vs BSNL structure; provides a concrete range for payment cycle.

Theme C: Profitability path, timeline to breakeven, and role of AMC/service revenues

  • Core questions
  • “Path to profitability” and whether 12–18 months is realistic for positive bottom line.
  • How important are AMCs (higher margin) and when do they start?
  • Expected AMC revenue size and recognition period.
  • Management response
  • Profitability path: grow business + optimize opex + working capital management; inventory build-out should “go away.”
  • Timeline: they say first target is positive EBITDA and EBIT, then PAT; “12 to 18 months is a reasonable time”.
  • AMC: starts after site acceptance and warranty period, “in the next few quarters”; AMC revenues recognized over 8 years.
  • They do not disclose AMC contract size yet (“not yet shared”).
  • Evasive/partial elements
  • No quantitative margin/EBIT/PAT bridge; AMC size withheld.
  • “12–18 months” is a directional answer, not formal guidance.

Theme D: Order book disclosure changes and international mix

  • Core questions
  • Why order book mix is heavily domestic (93% India / 7% international) despite international wins?
  • How much of order book is international and whether South America is “pilot/testing” vs rollout?
  • They also asked about why order book number is no longer emphasized.
  • Management response
  • They confirm order book exists: INR 1,529 crores (slight increase vs INR 1,514 crores).
  • New wins were mostly domestic “apart from South American 5G network,” hence current mix.
  • South America described as initial order after extensive POC, expected to lead to follow-on expansion as operators deploy in steps.
  • Evasive/partial elements
  • They refuse to quantify sites for international wins due to customer confidentiality.
  • No quantified international ramp plan beyond “hope to change profile going forward.”

Theme E: D2M (Direct-to-Mobile) commercialization trajectory and TAM

  • Core questions
  • What is the path to D2M market entry after approval?
  • Any certainty on orders/revenue?
  • TAM and site count vs BSNL?
  • Management response
  • Waiting for Prasar Bharati tender; once tender is out, they partner with SI (FreeStream/others). No clarity on tender timing.
  • TAM: “close to $1 billion” if nationwide rollout at anticipated scale; but rollout may be phased.
  • Site count: less than BSNL (broadcast sites lower).
  • Notable strength
  • Transparent about lack of tender timing and revenue certainty.

Theme F: R&D commercialization timing and competitive edge

  • Core questions
  • Which R&D investments are closest to commercialization and when meaningful revenue arrives?
  • Competitive differentiation vs Nokia/Ericsson/Huawei.
  • AI infrastructure acceleration—do current products benefit without extra R&D?
  • Management response
  • R&D is “evolutionary”; commercialization already starting (5G investments ~24 months; optical capacity evolution).
  • Competitive edge: “radio technology” performance + integrated BBU/transport; optical power/density; DCI product recognized by awards.
  • AI acceleration: current product sales improve, but also need higher-capacity evolution (access/core).
  • Evasive/partial elements
  • Still no hard commercialization revenue dates by product line; relies on qualitative “this year POCs/field trials” and “end of FY / early FY” for TJ1600-D3.

4. Guidance / Outlook

Explicit guidance (quantitative)

  • None provided in the form of revenue/margin targets.
  • Timeline-style targets (qualitative but time-bound)
  • “12 to 18 months” as a reasonable time to reach positive bottom line (analyst asked; management agreed directionally).
  • AMC start: “next few quarters.”
  • AMC revenue recognition: over 8 years.

Implicit signals (qualitative)

  • BSNL add-on order: “final stages,” “probably in this quarter.”
  • Profitability trajectory: “positive direction,” “path to profitability,” inventory/receivables should improve as acceptances complete.
  • International growth: management is “very bullish” and expects international traction to increase.
  • Product commercialization cadence:
  • TJ1600-D3: expects POCs/field trials this year, deployments “towards end of financial year or early next.”
  • D2M: tender-driven; no timeline certainty.

5. Standout Statements (direct / high-signal)

  • BSNL add-on timing & receivables
  • “We expect a lot of the BSNL receivables to also get cleared during the quarter.”
  • “Probably in this quarter” for the 26,000-site expansion order.
  • International credibility wins
  • “first commercial win for end-to-end 5G network deployment in South America… beyond the radios… baseband unit and the core.”
  • “international traction… increasing… very encouraging sign.”
  • Profitability framing
  • “first target will be positive EBITDA and EBIT and then going to PAT profitability.”
  • “12 to 18 months is a reasonable time to expect.”
  • Warranty provision normalization
  • Warranty provision distortion is “a one-off case… large network deployment… expected to normalize.”
  • AMC economics
  • “AMCs come with a much higher margin… going to start… in the next few quarters.”
  • AMC revenues recognized “over a period of 8 years.”
  • D2M commercialization uncertainty
  • “there is no clarity on when exactly the tender will happen.”
  • AI impact claim
  • “AI has increased the traffic by 20x.”

6. Red Flags / Positive Signals

Red flags
– BSNL timing risk remains high: “final stages… probably in this quarter” is repeated optimism, but BSNL-related delays have historically driven financial underperformance.
– No quantitative guidance despite repeated investor pressure; profitability timeline is directional.
– Order book international mix still skewed (93% India / 7% international for domestic wins in the quarter), suggesting international scaling may lag.
– AMC revenue size not disclosed even after multiple questions—limits ability to model margin uplift.

Positive signals
– Clear differentiation of international contract structure: no performance-linked payments; standard payment cycle (60–90 days).
– Balance sheet improvement signals: inventory down (2,438 → 2,358), cash up (505 → 589), and management links this to advanced procurement unwinding.
– Commercial credibility building: end-to-end 5G South America win + joint R&D endorsement.
– Warranty normalization narrative: management expects stabilization as installed base matures.

7. Historical Comparison & Consistency Analysis (vs prior 3 calls)

a. Change in Tone Over Time

  • Q2 FY26 (Oct 2025): bullish on macro/AI and international opportunities, but heavy losses and provisions; BSNL add-on PO delay acknowledged.
  • Q3 FY26 (Jan 2026): still loss-making; international engagements progressing; BSNL add-on PO delayed.
  • Q4 FY26 (Apr 2026): acknowledges FY26 transition and “delayed deals” leading to revenue shortfall; still negative PAT.
  • Q1 FY27 (Jul 2026): more optimistic on near-term catalysts:
  • BSNL add-on order “final stages” and “probably in this quarter.”
  • International wins are now commercial (South America end-to-end 5G), not just POCs.
  • Management explicitly ties improvements to working capital cleanup and profitability path.

Shift classification: More Optimistic (confidence increased; more “commercial win” language; stronger working-capital catalyst framing).

b. Tracking Past Commitments vs Outcomes

  • Past statement (Q4 FY26 / FY26 narrative): FY26 was a “transition” and management expected FY27 better results based on outlook and investments.
  • Expected by now: FY27 should start showing stronger financial turnaround.
  • What happened in Q1 FY27: Revenue up QoQ (402 vs 333 in Q4 FY26), inventory down, cash up; but PBT still deeply negative (PBT ~ -271 crores).

  • Flag: ✅/⏳ Mixed. Operational signals improved, but profitability not yet delivered.

  • Past statement (Q3 FY26 / Q2 FY26): BSNL add-on PO delays; inventory built in anticipation; expected PO timing in “coming months.”

  • Expected by now: PO receipt and collections to reduce receivables/DSO.
  • What happened in Q1 FY27: Management still says order is in “final stages” and expects receivables to clear “during the quarter.” No confirmation of PO receipt in the call.

  • Flag: ⏳ Delayed (BSNL remains the dominant working-capital overhang).

  • Past statement (Q4 FY26): international wireless wins and partnerships progressing; expectation of better FY27 financials.

  • Expected by now: conversion of trials/POCs into commercial orders.
  • What happened in Q1 FY27: South America end-to-end 5G commercial win + Europe 5G radio shipment + joint R&D.
  • Flag: ✅ Delivered (commercial traction now visible).

c. Narrative Shifts

  • From “POCs/trials” to “commercial wins” in international wireless:
  • Earlier calls emphasized trials/POCs and “expected to close.”
  • Now management highlights first significant customer win and first commercial end-to-end deployment.
  • BSNL remains central, but the narrative shifts from “delay” to “final stages / imminent.”
  • Order book emphasis reduced (analyst asked why order book number not shared as before). Management still provides the number but doesn’t emphasize international mix.

d. Consistency & Credibility Signals

  • Credibility improved on international commercialization (more concrete wins).
  • Credibility still strained on BSNL timing:
  • Multiple quarters/calls referenced expected materialization; Q1 FY27 still uses conditional language (“probably in this quarter”).
  • Overall credibility: Medium
  • Strength: clearer contract/payment structure for international; transparent about D2M tender uncertainty.
  • Weakness: repeated BSNL “near-term” catalyst without hard confirmation.

e. Evolution of Key Themes

  • Demand/macro & AI: consistently bullish across calls; AI traffic impact narrative becomes more detailed in Q1 FY27 (20x claim; WDM capacity roadmap).
  • Margins/profitability: remains the weak spot; management increasingly attributes losses to one-offs (warranty/inventory distortions) and expects normalization.
  • International expansion: improving trend—moving from engagements → commercial orders.
  • Working capital: persistent theme; Q1 FY27 shows some improvement (inventory/cash), but receivables still elevated.

f. Additional Insights (cross-period intelligence)

  • Warranty provision normalization is now explicitly tied to BSNL installed base and expected to “stabilize and come down.” This suggests prior quarters’ loss volatility may be structurally linked to BSNL scale-up rather than ongoing product quality deterioration.
  • Receivables “stickiness” explanation evolves:
  • Earlier calls: receivables high due to milestone-linked BSNL collections.
  • Q1 FY27: management adds that AR rose because increased shipments in the quarter flowed into receivables—implying collections lag may be partly timing rather than only BSNL.
  • AMC/service revenue is positioned as the next margin lever, but management still withholds contract size—suggesting either confidentiality or uncertainty in quantification.

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