This Tata-backed stock turned ₹1 lakh into ₹10 lakh in 2 years, rising about 900% on D-Street
Little-cap stock Tejas Networks increased by almost 900%, or over $645 per share, in just two years, becoming a multi-bagger. The stock’s strong long-term performance has improved investors’ wealth over the past two years by a factor of ten.
The stock has soared by about 68% so far this year alone. The stock price is currently above 710 rupees per share on Dalal Street. The corporation, which is supported by the Tata Group, is a major force in the telecommunications industry.
Tejas Networks’ shares on the BSE ended the day at 710.50 per share, up 16.55 or 2.38%. Earlier, the stock reached a daily high of $717 per share.
The market capitalization of the firm is around $10,807.41 crore at the present pricing.
The shares were at 71.7 rupees per share on BSE on October 16, 2020. Due to the weekend vacation, the market was closed on October 17 and 18 of this year.
Taking into account a share price of $717, the shares have increased by at least 900% since this point. With respect to the current closing price of 710.50 per share, Tejas stock has increased by at least 890.93% in the last two years.
On October 16, 2020, investors who invested Rs. 1 lakh in Tejas Networks shares saw a return of 900%, increasing their wealth to almost Rs. 10 lakh.
The stock even reached a 52-week high on October 10 of this year, trading at a price of 773 per share. The stock has increased by approximately 98% in just over 8 months after reaching a 52-week low of $359,50 per share on March 8, 2022.
The lowest level of Tejas from October 2020 to the present was 67.10 per unit, which was noted on October 15, 2020. Since then, the shares have increased significantly with just a few sporadic corrections. Tejas Networks’ long-term stick, however, has been up.
Tejas Networks’ 1-year returns are now around 37.26% greater than those of Bharti Airtel (15.07%), Vodafone Idea (-20.28%), Tata Communications (-15.21%), RailTel Corp (-24.36%), MTNL (8.4%), and OnMobile Global (-7.35%), according to the ICICI Direct website.
A subsidiary of Tata Sons, Panatone Finvest, signed a contract to buy a 43.35% share in Tejas Networks on July 29 for $1,884 crore, which comprised a preferential allocation of stock worth $500 crore and warrants for $1,350 crore.
Notably, an open offer was made by Panatone and other specific Tata Group firms to purchase 26% of Tejas Networks for $258 per share.
Tejas was controlled by Panatone, a division of the Tata Group, to the tune of 7,94,01,810 equity shares, or 52.40%, as of June 30, 2022.
In comparison to a loss of 49.62 crore in Q4FY22, Tejas Networks’ consolidated net loss shrunk significantly to 6.64 crore in Q1FY23. In Q1FY22, the firm reported a profit of 7.55 crore.
However, compared to 126.50 crore in Q4 FY22 and 144.25 crore in Q1 FY22, consolidated revenue in Q1 FY23 was 125.76 crore.
Tejas Networks reported a net loss of 117.13 crore and revenue of 550.59 crore as of March 31, 2022, respectively. The company reported significant business momentum and order flow in FY22, which resulted in a 73% increase in the order book year over year.
The government also gave the business clearance for the PLI (Production Linked Incentive) programme and as a Trusted Source for telecom equipment.
The PLI plan was introduced last year to advance the whole telecom manufacturing value chain and lessen India’s reliance on imports of networking and telecom goods from other nations. Tejas Networks benefits from the plan.
Additionally, Tejas successfully launched its domestic 4G RAN equipment on the commercial market in FY22 after completing proof-of-concept tests for an all-Indian 4G network.
Additionally, the business inked a new Tier-1 OEM in the USA and was chosen by many Tier-1 Indian telcos and ISPs for Metro DWDM and FTTX applications. The business also won multi-million dollar contracts in Africa and Europe.
Earlier this month, Tejas used hardware and software created and manufactured in India to successfully showcase a 4G/5G network and apps on an end-to-end native network.
The whole portfolio of cutting-edge wireless and wireline devices from Tejas Networks and its affiliate Saankhya Labs were displayed on the end-to-end network.
On October 21, Tejas will release its financial results for the second quarter of FY23.
Tejas Networks was established in 2000 and creates high-performance, carrier-class equipment needed to construct communications networks.
The business offers a broad range of optical, broadband, and data networking products, as well as 4G/5G wireless products, which are used by telecommunications service providers, internet service providers, utility companies, defence and government entities, and other organisations in more than 75 countries.
There are several places in a telecom network where Tejas products are employed, including cell towers, telecom exchanges, data centres, utility sites, and on client premises.
The Bank of Baroda analyst Jahnavi Prabhakar stated last month in a study for the whole telecom sector that the sector is primed to grow further in the upcoming years given the recent structural changes and the launch of 5G connectivity.
The economist had further stated that it is critical to take into account the sector’s historical performance as the Government of India gears up to usher in a new digital revolution in the coming months with the rollout of 5G services in the nation.
This has been investigated using data on the credit share of the telecom sector, ECB approvals in the sector, and revenue from auctions. In addition, it is anticipated that the PLI plan would increase output levels, create jobs, and support the industrial sector in the upcoming years.