Tejas Networks Q1 FY27: International 5G Traction, But Working Capital Remains the Core Story

Tejas Networks opened FY27 with a sequential improvement in revenue, reporting revenue from operations of INR 402 crore in Q1 FY27 versus INR 333 crore in Q4 FY26. The company remained loss-making, with profit after tax at INR -202 crore for the quarter, marginally better than INR -211 crore in the preceding quarter. The message from management was that demand signals are improving, especially in international wireless, but the near-term financial picture is still shaped by high working capital, elevated debt, and the timing of large domestic programs.

The quarter’s revenue mix was evenly split between India and international markets at 50% each (excluding other operating revenue). Management attributed the quarter’s performance to international shipments of 5G radios, including supplies to a European customer, and domestic shipments of 100G and 400G optical products and FTTx equipment. At the same time, the order book at the end of Q1 stood at INR 1,529 crore, only slightly higher than INR 1,514 crore in Q4 FY26, and notably skewed toward India.

The financial headline: higher revenue, but balance sheet stress persists

While revenue improved, profitability did not follow. EBIT was reported at INR -194 crore and PBT at INR -271 crore for Q1 FY27. The company’s balance sheet remains stretched. Inventory closed at INR 2,358 crore and net trade receivables rose to INR 2,232 crore from INR 1,905 crore in Q4 FY26. Net working capital increased to INR 4,478 crore and net debt rose to INR 4,277 crore.

Management acknowledged that working capital is a major factor behind the current financial profile. It also linked a significant portion of the inventory build to preparedness for the BSNL 4G add-on order, which the company expects will utilize inventory and ease working capital pressure once execution begins.

Business momentum: international wireless takes the spotlight

The clearest operating positive in Q1 was wireless traction outside India. Tejas reported a first commercial win for an end-to-end 5G network deployment in South America. Management clarified on the call that “end-to-end” includes radios, baseband unit, and core, positioning this win as a reference deployment for the company’s broader 5G stack.

In addition, Tejas said it completed manufacturing and supply of 5G massive MIMO radios to a global customer in partnership with NEC. The CEO described Tejas as NEC’s preferred partner for radios, with NEC focusing more on the software side such as vRAN. Management also indicated it was selected by a global Tier-1 telecom operator for a joint R&D project in 5G, suggesting deeper engagement beyond product supply.

In India, the key wireless catalyst remains the BSNL expansion. Tejas said it is awaiting an expansion order for 26,000 additional 4G sites, against a letter of intent already received. Management stated the order is in the final stages, with discussions ongoing on terms and conditions with integration partners, and expects it to materialize very soon, likely in the current quarter.

Wireline and utilities: steady demand, especially in higher-speed optical

On the wireline side, Tejas continued to link growth to data center connectivity, enterprise bandwidth upgrades, and 5G backhaul requirements. During the quarter, it supplied 100G and 400G DWDM systems to two Tier-1 telcos for 5G backhaul, enterprise links, and hyperscaler connectivity. The company also expanded its FTTx footprint with a Tier-1 Indian telecom operator for residential broadband rollouts.

Utilities remained an active vertical. Tejas was selected as a vendor for modernization of a large power utility’s communication network, consistent with management’s view that utilities are migrating from legacy TDM and SDH networks to IP-based networks.

International wireline momentum also showed up in Africa, where Tejas reported an expansion order for 100G and 400G coherent DWDM equipment from a leading wholesale bandwidth provider.

Profitability roadmap: management points to volume growth and service revenue

When questioned on the path to profitability, management framed the roadmap in three parts: growing revenues and market share, leveraging global OEM partnerships for international expansion, and improving margins through cost engineering and operating expense discipline. It also emphasized working capital improvements as an important lever to reduce finance costs.

Management offered a timeline expectation in response to an investor question, stating that 12 to 18 months is a reasonable timeframe to expect a move toward profitability, beginning with positive EBITDA and EBIT before achieving PAT profitability.

A meaningful component of the longer-term profit mix could be BSNL AMC revenues, which management said have not yet started. These will begin after site acceptance and the warranty period concludes. Management expects AMC revenues to start in the next few quarters and clarified that, once started, they would be recognized over an 8-year period. The company did not disclose the AMC value.

AI-driven networks: portfolio narrative, not near-term guidance

A notable portion of the presentation and call focused on the impact of AI on network architecture. The CTO stated that AI is driving about 20x traffic growth, requiring upgrades across aggregation, metro, and backbone networks, and high-bandwidth low-latency interconnects between geographically dispersed AI data centers. Management described bandwidth needs in the range of tens of terabits, with interconnect distances ranging from under 150 km to up to 1,000 km.

Tejas positioned its roadmap around higher-speed access and core networks, including 50G PON, higher-capacity routing, and coherent optics evolving toward 1.2T and 1.6T per wavelength. Management also noted that 6G commercialization is expected around 2030, with product launches likely around 2029 and capability demonstrations before that.

Separately, management provided an update on its TJ1600-D3 data center interconnect product, which was recognized as a top-3 finalist at the 2026 Leading Lights awards. It said the product is moving into customer engagements, with field trials expected during the year and potential deployments toward the end of the financial year or early next financial year.

The investor takeaway

Q1 FY27 reinforced two realities for Tejas Networks. First, the company is seeing international traction in wireless, including meaningful reference wins that could support future expansion. Second, the near-term financial profile is still dominated by working capital intensity and losses, with inventory, receivables, and net debt remaining elevated.

Management is effectively asking investors to watch three milestones over the next few quarters: the timing of the BSNL 26,000-site expansion order, the start of BSNL AMC revenues after acceptance and warranty periods, and conversion of international wireless engagements into repeat and scaled shipments. If these materialize as management expects, the company’s stated 12 to 18 month timeline toward profitability becomes easier to underwrite. If they slip, the balance sheet will continue to be the key constraint on the story.