This Tata-backed stock turned ₹1 lakh into ₹10 lakh in 2 years, rising about 900% on D-Street

Tejas Networks, a small-cap company, rose by about 900%, or over $645 per share, in just two years, turning it into a multi-bagger. Over the last two years, investors’ wealth has increased by a factor of 10 thanks to the stock’s exceptional long-term performance.

The stock has increased by around 68% only this year. On Dalal Street, the stock is presently trading for more than 710 rupees a share. The company, which is backed by the Tata Group, is a significant player in the telecom sector.

Shares of Tejas Networks on the BSE closed the day at 710.50, up 16.55 or 2.38%. The stock previously rose to a daily high of $717 per share.

At the current price, the firm’s market value is around $10,807.41 crore.

On October 16, 2020, the shares were trading on the BSE at 71.7 rupees per share. The market was closed on October 17 and 18 of this year due to the weekend break.

The shares have gained by at least 900% since this time, based on a share price of $717. Tejas stock has gained by at least 890.93% during the past two years, with regard to its most recent closing price of 710.50 per share.

Investors who made a Rs. 1 lakh investment in Tejas Networks shares on October 16, 2020 experienced a return of 900%, bringing their worth to roughly Rs. 10 lakh.

On October 10 of this year, while it was trading at a price of 773 per share, the stock even set a 52-week high. In less than 8 months after the stock hit a 52-week low of $359.50 per share on March 8, 2022, it has grown by around 98%.

Tejas reached its lowest level between October 2020 and the current day on October 15, 2020, with a unit price of 67.10. The shares have dramatically grown since then, with just a few occasional corrections. However, Tejas Networks’ long-term stick has been down.

According to the ICICI Direct website, Tejas Networks’ 1-year returns are now around 37.26% higher 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%).

On July 29, Panatone Finvest, a division of Tata Sons, agreed to purchase a 43.35% stake in Tejas Networks for $1,884 crore, which included a preferential stock allocation of $500 crore and warrants for $1,350 crore.

Notably, Panatone and other particular Tata Group companies made an open bid to buy 26% of Tejas Networks for $258 per share.

As of June 30, 2022, Panatone, a unit of the Tata Group, owned 7,94,01,810 equity shares, or 52.40%, of Tejas.

Tejas Networks’ consolidated net loss decreased dramatically to 6.64 crore in Q1FY23 from a loss of 49.62 crore in Q4FY22. The company declared a profit of 7.55 crore for Q1FY22. However, consolidated revenue in Q1 FY23 was 125.76 crore as opposed to 126.50 crore in Q4 FY22 and 144.25 crore in Q1 FY22.

As of March 31, 2022, Tejas Networks recorded a net loss of 117.13 crore and revenue of 550.59 crore, respectively. In FY22, the company reported strong commercial momentum and order flow, which led to a 73% year-over-year rise in the order book.

The PLI (Production Linked Incentive) programme and as a Trusted Source for telecom equipment were also approved by the government for the company.

The PLI strategy was unveiled last year in an effort to improve the whole value chain of telecom manufacturing and reduce India’s dependency on imports of networking and telecom products from other countries. The proposal favours Tejas Networks.

Additionally, Tejas completed proof-of-concept testing for an all-Indian 4G network and successfully released its domestic 4G RAN equipment on the commercial market in FY22.

Additionally, the company signed a new Tier-1 OEM in the USA and was picked for Metro DWDM and FTTX applications by many Tier-1 Indian telcos and ISPs. Additionally, the company secured multi-million dollar contracts throughout Europe and Africa.

Earlier this month, Tejas successfully demonstrated a 4G/5G network and apps on an end-to-end native network using hardware and software designed and produced in India.

On the end-to-end network, the whole array of cutting-edge wireless and wireline equipment from Tejas Networks and its subsidiary Saankhya Labs were on exhibit.

Tejas will announce its financial results for the second quarter of FY23 on October 21.

Since its founding in 2000, Tejas Networks has been producing the high-performance, carrier-class hardware required to build communication networks.

The company provides a wide range of 4G/5G wireless, optical, broadband, and data networking devices that are utilised by telecommunications service providers, internet service providers, utility companies, defence and government bodies, and other organisations in more than 75 countries.

Tejas devices are used in a variety of locations throughout a telecom network, including cell towers, telecom exchanges, data centres, utility sites, and on client premises.

Given the recent structural changes and the introduction of 5G connectivity, Bank of Baroda analyst Jahnavi Prabhakar noted last month in a research for the whole telecom sector that the industry is poised to develop even more in the following years.

The economist had further said that, as India’s government prepares to usher in a new digital revolution in the months to come with the introduction of 5G services in the country, it is crucial to consider the sector’s previous performance.

Data on the credit share of the telecom sector, ECB approvals in the sector, and auction proceeds have all been used to study this. In the following years, it is also predicted that the PLI plan would boost industrial output levels, generate employment, and assist the industry.

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