Tejas Networks shares surged nearly 9% on April 3, extending their recent rally following reports of Bharat Sanchar Nigam Ltd’s (BSNL) Rs 61,000 crore 5G expansion plan. Investor sentiment turned bullish as the Department of Telecommunications (DoT) allocated premium 5G spectrum bands to BSNL, marking a major milestone for India's state-run telecom operator.

Stock Performance

The Tejas Networks stock hit an intraday high of Rs 904, up 12.58%, before settling 8.73% higher at Rs 873.1 on the NSE. This marks the third consecutive session of gains, with the stock rising over 15% in this period.

Interestingly, shares had initially opened 2.37% lower but rebounded sharply following reports that BSNL had been granted access to 700 MHz and 3300 MHz spectrum bands for 5G services.

BSNL’s 5G Expansion Plan

BSNL is expected to begin its 5G rollout in select cities, starting with Delhi, before gradually expanding across India. The Rs 61,000 crore investment is aimed at strengthening telecom infrastructure and boosting indigenous network capabilities.

This development is positive for Tejas Networks, which is a key supplier of 4G/5G RAN equipment and routers. Analysts believe that Tejas Networks could see increased order flow as BSNL advances its 5G plans.

Financial Performance

For the third quarter of FY25, Tejas Networks reported a net profit of Rs 165.67 crore, a sharp turnaround from a net loss of Rs 44.87 crore in Q3FY24. However, sequentially, net profit declined by 40% from Rs 275.18 crore in Q2FY25, raising some concerns about short-term growth.

Challenges Ahead

Despite the bullish sentiment, Tejas Networks faces some challenges:

• Declining order book: The company's order book has seen a dip in recent quarters, signaling potential delays in new contracts.

• Rising inventory levels: Increased stockpiling could indicate slower demand absorption or operational inefficiencies.

Market Outlook

The telecom sector is witnessing strong momentum, with the Indian government pushing for 5G adoption and indigenous telecom manufacturing. Tejas Networks remains a key player, and its fortunes will largely depend on BSNL’s execution of the 5G rollout and broader demand for domestic telecom equipment.

With growing investments in network infrastructure, Tejas Networks is well-positioned for long-term growth, though short-term volatility remains. Investors will closely monitor new order inflows and margin trends in the coming quarters.

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