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00:00We'd focus in on a Tejas Networks which was the other buzzer in trade yesterday.
00:04Strong set of numbers, margins have come in extremely strong and we have with us Anand
00:10Athreya who is the CEO and MD and we have Arnab Roy who is the COO and Executive Director at
00:16Tejas Networks. Welcome gentlemen to NDTV Profit. Thank you. Thanks for hosting us.
00:23Right. Anand, let me first start off with you. What's the execution for BSNL like? I think that's
00:29the key question. How much of that has happened in FY24? How much would that contribute to FY25's
00:37revenue number? Because I believe pretty much the entire contract will be executed,
00:41the balance of it will be executed in FY25. Yeah, so on BSNL front we are executing or
00:50we have executed two projects. One is the BSNL Mon which is the wireline that has gone very well
00:58and then on the BSNL Wireless we have delivered close to 10,000 plus sites by end of March and
01:06we are continuing to deliver every day. So that's been going well. We normally don't give guidance
01:11on the numbers but net net takeaway is you can expect the BSNL whatever is in the order book
01:18to be executed this financial year. Understood. So I also want to understand that out of the
01:268200 per order book, how much percentage is the BSNL contact value in it? In terms of percentage
01:32if you can give us. So maybe I can take the question. So we don't share breakups in terms
01:43of the order book and customers and all but yes as you can understand there is a good amount over
01:49there but however there is also a good part of the order book is also for our wireline products
01:56and also like to say that this is just not the pipeline that we have for our business in FY25
02:02because some good part of our business comes from what we call run rate customers. They are
02:08customers who give us purchase orders during the year and consume it in one or two quarters
02:13from that. So that also becomes a large part of our business which we don't put it as order book
02:18because that's like a long-term contract that we have throughout the year or multi-year and
02:23this come by. So as a combination of that I mean it's like it's hard to give a big breakup
02:29percentage of what the business is going to be like but as far as the current order book is
02:33concerned yes there is a good part of it is BSNL 4G but a significant part of our wireline products
02:39are there as well. Sure and Anand Ravi stay with you. So a major part of this 8200 odd
02:49crore order book is BSNL and that for a large part of next year will be executed in FY25
02:57itself. So you'll have a higher base in terms of revenue and a lower base in terms of order book.
03:04How does that stack up when we're looking beyond FY25? Do you expect the run rate business to
03:11increase substantially and therefore that should aid the FY26 number or how should one look at it
03:18going forward? So going forward in FY26 it will be a combination of some of the large
03:29tender-based opportunities which are in India as well as a combination of what we call is
03:34run rate business not only from the Indian private telco as well as internationally.
03:39If you see I mean the opportunity space for you know us going forward is in India there's a lot
03:46of into the private telco investment happening in expanding the 5G networks as well as expanding
03:51their broadband networks into broadband services to homes and enterprises which also results in
03:56expansion of the backbone network. So that's one of the big opportunities for us. As far as the
04:01government is concerned you know BSNL is going to have 5G upgrades and then the 5G tenders in
04:08the higher bands and the corresponding expansion in the backbone networks. There are also the
04:13utility networks which are expanding. So all in all I mean this is a lot of opportunities which
04:18are coming our way in India and internationally it's the same thing. There's a huge amount of
04:22broadband investment that is happening in the developed countries in the US and EU. A lot of
04:284G expansion, 4G, 5G expansion happening in the emerging economies and all of those opportunities
04:34are actually addressable by us. So we you know expect to see business going forward as a combination
04:41of those things which are could be as a combination of large contracts as well as a good amount of
04:48rounded business both in wireless as well as the wireless space. Got it, I take your point. So Anil
04:53I'll come to you on this you know if you can quantify you know how much recurring business
04:58you'll be expecting in FY25 and then do you expect that you know your top line will grow to
05:05you know 10,000 crores in FY25 then?
05:09Okay, no I mean we don't give guidance on these numbers but I think you can make your
05:20guess based on you know the order book and the other things which are coming. But yes we are
05:25you know continuing to execute and ship our products you know with the customer in line
05:33with the customer expectations and we see a big opportunity space. So I think it's a combination
05:38of that is that's what we can really share with you without getting into more guidance in
05:43terms of specific numbers you know or customer breakups and all. Okay, we tried our best. Anand
05:49let me come back to you with regard to just your margins. You know a very strong set especially
05:56when I'm looking at Q4 versus some of the past numbers you've done. Can one expect a 20 percent
06:04kind of a margin number at least in FY25 given the kind of visibility you have on the order book
06:10as well as the run rate business? Yeah look in last quarter that is Q3 we shipped a lot of low
06:18margin products and obviously we have products with higher margins and ones with lower margins
06:23and we have you know different customers and different deals. We normally don't give margin
06:28guidance but you know one can expect that we'll always try to get better margins by you know
06:33managing prices you know good deals so that it's going to be a combination of everything right. I
06:38mean it's not we'll just be chasing deals we'll also look at how we optimize our costs and expenses
06:45so we get better margins. Understood and so with regards to your order book I also want to
06:52understand Arnab that you know your Tata Com and TCS where is the place stand at you know what
06:57kind of business one can expect to be executed by FY25?
07:05For TCS? TCS and TCL. Oh TCS and TCL yeah I think both of them are significant
07:12customers for us of course that a lot of the existing TCS business is more connected to the
07:18BSNL 4G, 5G so that's going to continue and there are as I mentioned there are a lot of
07:24opportunities coming in terms of 5G upgrade which is part of the current tender and also
07:30the newer 5G tender in the upper bands category. TCL has been a continuing customer for us
07:37for a long time mainly on our wireline products which are as part of their enterprise services
07:43for the backbone networks so that will continue and they are actually part of our 100
07:48customers where you know we have long-term contracts with them and purchase orders come
07:53and get executed during the quarter and subsequent quarter as well so we expect the TCL business to
07:58continue and grow as well and TCS will be largely a lot of the wireless deals that are there in
08:06BSNL and potentially elsewhere. Sure, Anand you know just with regard to the kind of opportunity
08:15that I'm hearing from you guys you know there's a plethora of opportunities talk about
08:21export, talk about Bharatnet, talk about the internal Tata group companies which are also
08:29you know unlocking orders in that sense so the opportunity is large is there internally
08:37a threshold with regard to where you see the kind of profitability or is there a profitability
08:44goal internally set that below a certain value you won't probably take business
08:51is that at all part of this entire you know moving juggernaut? Well look it's always our
08:59goal to increase top line, control our costs, increase profitability and we want to get to
09:05profitable growth at some point but again all of this one thing that we have to be cognizant is
09:12you know we are a growing company, we have to invest to be competitive, to be relevant in the
09:18market, to lead in the market so we will continue to do that because once you build the products
09:23then you know we will get customers, we'll get deals so look our aspirations are very high we
09:28want to be a global OEM out of India right so we have to make the right investments to act and
09:34execute ruthlessly and flawlessly just to be you know competitive globally and also be a leader in
09:41the domestic market. Understood, Anand I'll stick with you on this one I want to understand you know
09:47with the acquisition of Sankhya labs what are the kind of synergies are you expecting out of it one
09:52thing and how much will it contribute to your top line then? So look Sankhya has been a good
09:59acquisition so you know they are they have very innovative products so if you we announced
10:07recently I think two quarters ago that they won a large vehicle tracking system deal with space
10:15Indian space agency so that you know is execution is in progress then we're also
10:22you know piloting with Sinclair and also Prasad Bharti on a broadcast radio head
10:29you know in India so that is actually happening as we speak and they also have a silicon chip
10:36you know that they've designed that is used in their products and they're also selling it to
10:40other customers right so it is going to be a significant part of our growth in fact we find
10:47them very complementary you know we don't have broadcast and you know satellite kind of products
10:52so it is going to be very complementary to our portfolio and once the acquisition is fully done
10:58they will be an integral part of our growth story. So Arnab last off are you seeing a significant
11:06shift from the entire demand patterns which you are seeing or rather competition that you
11:16are seeing from China is there a large shift there towards India now and are you a beneficiary
11:23of that are you seeing that meaningfully happen on ground so that's the first part the second
11:27piece of this is what's the kind of PLI numbers that one can start to expect going forward fi25
11:3426. Yeah so first part is competition or you know lack of competition they are all from a
11:43particular country yes I mean that has significantly benefited many many OEMs
11:50kind of thing but those are that is limited to India limited to few geographies we also see
11:55opportunities where a lot of the networks that were deployed with this equipment are also getting
12:00replaced so those are also very strong opportunities that are coming up our way
12:06in terms of upgrading and reducing their that equipment with what is called you know trusted
12:12equipment so that is definitely a good opportunity both as well as in India as well as abroad in many
12:19geographies regarding PLI you know PLI is a very excellent you know government policy which is
12:26also benefiting us in terms of manufacturing investments and and the returns that come
12:32thereof we have an approval for a I mean this is public information that our PLI grant has
12:38been approved and up to and we can claim over five years up to you know twenty eight hundred
12:44crores of PLI incentives we're eligible for subject to us making the manufacturing investments
12:50and all the business growth that we have committed to so I think that's an excellent policy which is
12:56helping us which is subsidizing a lot of our manufacturing investments that we are having to
13:02make to be able to really scale and support the growth that we're anticipating so I think it's
13:10a very good policy for us. Well I take your point well with that we're completely short
13:17of time thank you so much gentlemen for joining us at NDTV Profit and spending your valuable time.