Tejas Networks announces consolidated results for quarter ended June 30, 2019
Bengaluru, July 24, 2019: Tejas Networks [BSE: 540595, NSE: TEJASNET] today reported its financial results for the first quarter ended June 30, 2019. Tejas Networks designs, develops, manufactures and sells high-performance optical and data networking products, which are used to build high- speed communication networks over optical fiber.
For the quarter ended June 30, 2019, our consolidated revenues (net of pass-through component sale) were ` 156.6 crore which was a year-on-year decline of 32.5%. The weak revenue during the quarter was primarily due to steep decline in Government business. The Government business was 15% of revenues during the quarter as compared to 55% in Fiscal 2019. The decline is due to deferment of spending on Government projects and we expect to see enhanced Government spending during the second half of the fiscal year.
Our Operating profit was at ` 6.6 crore which was 4.2% of our revenues (net) as against 19.5% for Q1 2019. Our profit after tax was ` 5.9 crore which was a year-on-year decline of 87%. The decline in profits is primarily due to decline in revenues, coupled with the fact that a majority of our costs such as R&D, are linked to manpower and are fixed in nature. We believe that the margins will normalise on a full year basis, with better business momentum.
Mr. Sanjay Nayak, Managing Director and CEO of Tejas Networks said, “A large portion of our Government business is lumpy with significant fluctuations on a quarterly basis. To de-risk our business, we aim to increase our international revenue contribution to at least 50% of our total revenues in the medium term. We are continuing to make investments in international sales and recently we have hired a strong sales leader in US, which is expected to be a key market for us.” The macro factors driving our business continue to be robust, as increased use of data by consumers, businesses and governments and the rollout of 5G networks is resulting in an increased demand for our optical transmission equipment.
During the quarter, our DSO increased to 284 days and working capital to 283 days primarily due to continued delay in collections from a PSU customer and higher revenue in the last month of the previous quarter.
Mr. Venkatesh Gadiyar, CFO said, “While our receivables days are stretched our cash position is comfortable with cash and cash equivalents (including investment in mutual funds) at ` 231 crore as of June 30, 2019. We are virtually a debt-free company. We expect to collect the overdue amounts and normalise our working capital cycle in near future.”
Investment in Research and Development (R&D) continues to be a key focus area for us. Our products have won accolades at national as well as international levels. Tejas’ GPON OLT product won the prestigious “National Technology Award” from Department of Science and Technology, Government of India. Our latest ultra-converged broadband access/edge product family, was the finalist at the “Leading Lights Award 2019” from Light Reading, USA. As on date, we have filed for 349 patents and during the quarter, we were granted 1 patent bringing our cumulative grant to 107 patents.
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ABOUT TEJAS NETWORKS
Tejas Networks designs, develops and sells high-performance and cost-competitive networking products to telecommunications service providers, internet service providers, utilities, defense and government entities in over 75 countries. Tejas products utilize programmable, software-defined hardware architecture with a common software code-base that delivers seamless upgrades of new features and technology standards. Tejas Networks is ranked among top-10 suppliers in the global optical aggregation segment and has filed over 349 patents.
For more information, visit Tejas Networks at http://www.tejasnetworks.com or
Contact
Investor Relations: ir@india.tejasnetworks.com
Attn: Mr. Santosh Kesavan: skeshavan@india.tejasnetworks.com
Phone: +91 80 41794600
SAFE HARBOUR
Certain Statements in this release concerning our future growth prospects are forward-looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in Such forward-looking statements due to risks or uncertainties associated with our expectations with respect to, but not limited to, our ability to successfully implement our strategy and our growth and expansion plans, technological changes, our exposure to market risks, general economic and political conditions in India which have an impact on our business activities or investments, changes in the laws and regulations that apply to the industry in which the Company operates. The Company does not undertake to update any forward looking statements that may be made from time to time by or on behalf of the Company.