For Q4, 2020, consolidated revenues (net of pass-through component sale) were Rs. 52.7 crore which was a YoY decline of 80.2%. Decline in revenues resulted in a loss before tax and before impairment of intangible assets of Rs. 56.7 crore, as compared to a profit of Rs. 37.1 crore for corresponding previous period, since a majority of costs other than cost of material, are linked to manpower and are fixed in nature. The weak revenue during Q4 was primarily because of operational challenges and inability to ship confirmed customer orders because of lockdown due to Covid-19 and pushout of new customer orders, which were otherwise expected. The company also reassessed the marketability of its intangible assets under development as well as capitalized intangible assets, and has taken a one-time impairment charge of Rs. 69.87 crore towards the accumulated costs relating to past R&D.
For the year ended March 31, 2020, revenues (net of pass-through component sale) were Rs. 379.8 crore, which was a YoY decline of 56.7%. As a result, for the year, loss before tax and before impairment of intangibles was Rs. 68.7 crore (Loss of Rs. 138.6 crore, post one-time R&D impairment charge), against a profit before tax of Rs. 150.0 crore for the corresponding period. Revenues from customers in India (which was 79% of total revenues in FY19) declined by 63% YoY and in particular, revenues from the India Government segment declined by 88% YoY.
Mr. Sanjay Nayak, Managing Director and CEO of Tejas Networks said, “Indian telecom sector is undergoing major financial stress, resulting in capex reduction by all private operators. In addition, Government spending on telecom projects declined sharply during FY20, resulting in a major revenue decline for us. We have put a lot of focus to reduce our dependence on India, and our medium term goal is to get 50% of our revenues from international customers. We made significant progress during FY20 in terms of securing new international customer wins and increasing our sales investments, but we could not see the positive impact in Q4, due to pushout of orders because of COVID-19.
In the short-term, due to ever-changing COVID-19 situation, it is likely that we will have fluctuations in the Company’s operations. There may be delays in customer orders and with various logistics and governmental restrictions, even the execution of orders in hand could be impacted. From a macro industry outlook, with more people working remotely and many services being accessed from homes, there has been a significant increase in data traffic in telecom networks, which will drive a demand for higher bandwidth and more optical and data transmission equipment. Our customers are expected to increase their investments to address fiber-to-the-home broadband requirements and to augment the capacity of their optical networks.”
Mr. Venkatesh Gadiyar, CFO said, “As of March 31, 2020, we are a debt free Company and our cash and cash equivalents, including investment in liquid mutual funds and deposits with financial institutions, stood at Rs. 280 crore. Our receivables are at Rs. 456 crore, of which a majority is expected to be collected in FY21 and we also have inventory of Rs. 252 crore, a large part of which is expected to be shipped to customers in FY21. During FY21, we expect to improve our cash position from our current levels, based on our collection plan, inventory usage and tight operations. We have done a detailed cash flow planning for the next 12 months and believe that we are well covered to meet all our business growth requirement. Since the Company has made a loss, as per our policy, the Board has decided not to recommend any dividend this year.”
As on date, we have filed for 349 patents and during the quarter, we were granted 3 patent bringing our cumulative grant to 116 patents.
Sanjay Nayak, CEO & Managing Director of Tejas Networks said, “Our country is grappling with the biggest humanitarian crisis of our times. We appreciate and support the outstanding work being done by our Government and other agencies in tackling this unprecedented situation. As a responsible organization, we are making our humble contribution for these disaster relief efforts.
Tejas Networks has supplied telecom equipment to all the major communication service providers, mission-critical government and defence networks. At this critical juncture, when the need for digital connectivity is critical, we are ensuring that we provide timely support to our customers so that businesses, government offices, hospitals, homes and other essential services stay connected”.
Saankhya Labs formed the board of advisors to provide insights, advice, and non-binding recommendations to its Board and Executive leadership team. Parag Naik, CEO of Saankhya Labs said, “I would like to welcome Prof. Karandikar to our Board of Advisors. As we continue to grow in the wireless solutions domain, our advisory board members bring an incredible variety of experience and insight to the table to help take the company to the next level of growth.”
Prof. Abhay Karandikar is currently the Director, Indian Institute of Technology (IIT) Kanpur. Prof. Karandikar is also a Member (Part-Time) of Telecom Regulatory Authority of India (TRAI). Before joining IIT Kanpur as the Director in April 2018, he served as Institute Chair Professor in the Department of Electrical Engineering at Indian Institute of Technology (IIT) Bombay. He also served as the Dean (Faculty Affairs) and Head of the Electrical Engineering Department at IIT Bombay. He spearheaded a national effort in setting up Telecom Standards Development Society of India (TSDSI), was the founding member and former Chairman of TSDSI. He was a member of High-Level Forum on 5G setup by the Government of India and Chaired the 5G Spectrum Policy Task Force. Prof. Karandikar has several patents issued and pending, contributions to IEEE, 3GPP standards, contributed chapters in books, and a large number of papers in international journals and conferences to his credit. Prof. Karandikar was awarded with IEEE SA’s Standards Medallion in December 2016 in New Jersey.
Prof. Abhay Karandikar said, “Saankhya Labs is working on some really innovative solutions in wireless communications area, and I am happy to be part of their advisory board to guide them in their endeavour to build path-breaking products and solutions to solve some of the current problems in the communications industry.”
Saankhya Labs had formed a new Board of Advisors in December 2019 comprising of seasoned leaders from the industry, which included – Kiran Deshpande, who is an accomplished leader and Angel investor with 3 decades of industry experience which included roles as CEO of Mahindra British Telecom (MBT), Co-Founder, and President of Mojo Networks. And, Amar Maletira, who is a seasoned executive with more than two decades of broad leadership experience in business, sales, finance, and corporate development in the technology industry. Currently, he serves as Executive Vice President and Chief Financial Officer of VIAVI (formerly JDS Uniphase).
With the addition of Prof. Karandikar, Saankhya has expanded the board of advisors to include an accomplished thought leader with strong credentials in academia and research, to bring all-round expertise which it can rely on for its continued growth.
About Saankhya Labs:
Saankhya Labs, a subsidiary of Tejas Networks, is an innovative leading-edge technology company with a breadth of wireless communication system solutions. Saankhya offers a wide range of communication products for 5G NR, Broadcast, and Satellite Communication applications. With over 100 international technology patents and unique ‘chipset-to-systems’ expertise, Saankhya’s solutions include award-winning SDR chipsets for communication, next-gen OpenRAN Solutions for 5G networks, multi-standard direct to mobile (D2M) broadcast, and Satcom solutions.
TV white space (TVWS) is an unlicensed UHF spectrum that can be used effectively to provide rural broadband internet and IoT connectivity in underserved areas. The technology is suitable to provide non-line of sight (NLOS) coverage over long distances (up to 15 Kms) in rural environments.
Saankhya Labs TVWS solution includes two radio products – MEGHDOOT, which is a Base Station Radio and DHAVAL which is a Client Radio. The product is based on IEEE 802.22 standard and supports point-to-point and point-to-multipoint mode of operation. The Saankhya TVWS Radios provide highest spectral efficiency compared to other similar equipment as they use complete 6MHz TV Band available for TVWS. Saankhya’s TVWS solution also comes with a remote Element Management Software (EMS), that helps in remote provisioning and monitoring of the equipment which is very crucial for remote deployments. Powered by Saankhya’s patented Software Defined Radio (SDR) Pruthvi chipsets, the Base Station and Client Radios are completely designed, developed and manufactured in India.
Saankhya Solution has numerous applications. It can help connect millions of people living in rural areas with high speed broadband internet in a highly cost-effective manner. During natural disasters like cyclones or earthquakes, when mainstream communication networks are affected, the TVWS radio solution can be used for setting up an auxiliary communication network in just couple of hours.
It can be used for highly secure encrypted defence communication in remote areas. The solution also can be used for setting up remote surveillance and monitoring system in mines, oil rigs, remote factories and warehouses, perimeter security in airports and defence bases etc. The TVWS radio solution can be used for IoT applications including remote sensors for agriculture, IoT solutions in factories and mines etc.
In India, Saankhya has conducted trials in collaboration with various institutions like IIT Delhi, IIT Mumbai, and IIT Hyderabad, in Delhi, Palghar, Maharashtra and Medak, Telangana and jointly with ERNET in Varanasi, UP and Srikakulam, Andhra Pradesh.
Internationally, Saankhya has supplied TVWS products for trials to customers in USA, UK, South Africa, South Korea, Zimbabwe, New Zealand and Japan. Now with FCC certification in place, Saankhya Labs solution is ready for roll out the solution globally.
“We are extremely happy to present to the world our new FCC certified broadband wireless products. We are proud to be amongst the first broadband wireless equipment vendors from India to have an FCC certified product and we are now fully focussed on leveraging the enormous benefits of this products in connecting the rural and remote areas in various countries around the world,” said Saankhya Labs CEO Parag Naik.
About Saankhya Labs:
Saankhya Labs, a subsidiary of Tejas Networks, is an innovative leading-edge technology company with a breadth of wireless communication system solutions. Saankhya offers a wide range of communication products for 5G NR, Broadcast, and Satellite Communication applications. With over 100 international technology patents and unique ‘chipset-to-systems’ expertise, Saankhya’s solutions include award-winning SDR chipsets for communication, next-gen OpenRAN Solutions for 5G networks, multi-standard direct to mobile (D2M) broadcast, and Satcom solutions.
Tejas Networks has recently received purchase orders totalling over INR 60 crores from BEL, towards supply and services of its optical and data networking equipment for various projects won by BEL, which includes the Kerala Fibre Optic Network, defence communication networks and smart city projects.
Mrs. Anandi Ramalingam, Director (Marketing) at Bharat Electronics Limited said, “Communication technology is becoming a critical part of defence systems and having an indigenous eco-system is important to address our long-term strategic needs. We are pleased to partner with Tejas Networks, India’s leading R&D-driven telecom products company in the private sector, and combine our complementary strengths to address emerging opportunities in the defence, strategic and civilian sector. BEL has proven capabilities in delivering projects that require complex electronic system design, engineering and production, while Tejas is strong in R&D-led, high-technology product development for optical and data communication. Working together, we expect to create a strong indigenous R&D-driven eco-system, which will reduce our dependence on foreign technology and boost high-value, indigenous electronics manufacturing within the country, in line with the Make in India program.”
Mr. Sanjay Nayak, Managing Director and CEO of Tejas Networks added, “We are excited to enter into a strategic partnership with BEL, India’s flagship defence electronics company with an outstanding track record of execution and deep understanding of complex defence systems as well as strategic and civilian projects. This partnership will enable us to offer our state-of- the-art optical transmission, access and data-switching products for turnkey projects in India and internationally. It will also diversify our customer base across a wider set of networking applications and domains.”
Highlights for the quarter:
• India-Private segment grew 67% for H1 on YOY basis
• Added 5 new international customers in Q2, and closed techno-commercials on 6 new deals
• DSO (excluding BSNL) decreased by 24 days as compared to Q1
• Cash and cash equivalents increased by ₹ 59 Cr to ₹ 290 Cr as of September 30, 2019
For Q2, 2019, consolidated revenues (net of pass-through component sale) were ₹ 85.1 crore which was a year-on-year decline of 58.0%. The weak revenue during the quarter was primarily due to lower revenues from India Government segment, which had a year-on-year decline of 88% for H1 ended September 30, 2019, on account of BSNL and Bharatnet. On the other hand, India-Private segment was robust and grew by 67% year-on-year for the first six months. Decline in revenues resulted in a loss after tax of ₹ 4.4 crore for the quarter ended September 30, 2019, since a majority of costs such as R&D, are linked to manpower and are fixed in nature.
For the half year ended September 30, 2019, revenues (net of pass-through component sale) were ₹ 241.7 crore, which was a year-on-year decline of 44.4%. As a result, for H1 2019, profit after tax was ₹ 1.5 crore, a decline of 98.1% on year-on-year basis.
Mr. Sanjay Nayak, Managing Director and CEO of Tejas Networks said, “As we anticipated, there was a decline in India Government business which is lumpy in nature, and resulted in weak Q2 revenues. Our medium term goal is to increase our international revenue contribution to at least 50% of our total and we are on track to achieve it. Despite delay in collection from BSNL, our cash position continues to be strong, which will help us to invest and achieve our medium term goals. We see strong momentum in our international business, and during the quarter we added 5 new international customers. We also closed techno-commercial discussions for 6 new international customer deals, each of which are expected to result in multi-million orders during H2 of this year.”
Mr. Venkatesh Gadiyar, CFO said, “During Q2, our cash position improved by ₹ 59 crore and our cash and cash equivalents, including investment in liquid mutual funds and deposits with financial institutions, stood at ₹ 290 crore. During the quarter, our overall DSO marginally improved to 277 days and excluding BSNL, our DSO improved by 24 days to 173 days, as compared to June 30, 2019. We also started to receive some amount of long-overdue payments from BSNL during the quarter. We are practically debt-free and we have a strong balance sheet to support our growth plans.”
As on date, the company has filed for 349 patents and during the quarter was granted 2 patents, bringing the cumulative grant to 109 patents. Tejas Networks recently launched a new product, TJ1600S/I, which is the world’s largest disaggregated multi-terabit packet-optical switch optimized for 5G, cloud and broadband networks.
