Tejas Networks (TEJASNET) Q4 17/18 earnings summary

Executive summary

• FY18 was a transition year: consolidated net revenue fell 9.6% YoY to ₹739.87 crore, while PAT rose 14.6% to ₹106.52 crore, aided by higher other income and the prior-year exceptional charge.

• India revenue grew 15.5% YoY; international revenue declined 54.1% amid a shift from OEM channels toward direct sales. The IPO strengthened the balance sheet and supported growth investment.

Financial highlights

• Consolidated revenue, net of taxes and component sales, was ₹739.87 crore versus ₹818.89 crore; product revenue fell 15.0% and services revenue rose 113.6% to ₹77.39 crore.

• Gross profit was ₹298.42 crore, down 3.9% YoY; gross margin improved 240 bps to 40.3%.

• EBITDA was ₹152.87 crore, down 9.2% YoY; EBITDA margin was 20.7% versus 20.6%. Operating profit after depreciation was ₹91.61 crore versus ₹112.01 crore.

• PAT was ₹106.52 crore versus ₹92.98 crore; FY17 included a ₹30.47 crore intangible-asset write-off. Basic and diluted EPS were ₹12.41 and ₹11.73, down 11.9% and 16.7%.

Outlook and guidance

• FY19 began with the largest order book in the company’s history; management expected strong, profitable growth and positive results from international sales-force investments.

• Growth priorities include increasing share in India, expanding direct sales in South-East Asia, Africa and the Americas, and broadening products for optical, broadband access, SDN/NFV and data-center interconnect markets.