Tejas Network slips on reporting Q1 net loss of Rs 6 cr

Tejas Networks declined 1.17% to Rs 467.85 after the company reported a consolidated net loss of Rs 6.64 crore in Q1 FY23 compared with a net profit of Rs 7.55 crore in Q1 FY22.

Net revenue during the quarter was at Rs 125.76 crore, down 12.8% YoY. The company said that the Q1 revenue was weak since it could not fulfill customer orders due to component shortages. It is making changes to internal processes and tools to better manage the supply chain.

The company reported a pre-tax loss of Rs 12.94 crore in Q1 FY23 as against a pre-tax profit of Rs 8.34 crore in Q1 FY22. Total expense increased 9.07% to Rs 157.39 crore. Cost of raw materials consumed rose 2.18% to Rs 67.40 crore in Q1 FY23 over Q1 FY22.

With a healthy order book of Rs 1158 crore and good visibility of new order inflows, the company expects to accelerate quarterly revenue growth during the rest of the financial year.

Sanjay Nayak, managing director and CEO of Tejas Networks said, "We continued to experience supply chain challenges and we could not manufacture enough products to make complete, balanced shipments against our open orders. We are re-engineering our supply chain processes and IT tools, to better manage the unpredictability of component supplies. With these changes, along with our strong order book of Rs 1,158 crore and advance inventory actions, we expect to see better revenue performance in the coming quarters. We continue to increase our R&D and manufacturing investments for 4G and 5G wireless products and are seeing a good pipeline of business building up."

Venkatesh Gadiyar, CFO said, "During Q1, we saw margin pressure due to industry-wide increase in component prices over last few quarters, which we could not pass on to some of our customers with whom we had agreed for fixed price deals. Our cash position continues to be healthy and as on June 30, 2022 our cash and cash equivalents, including investment in liquid mutual funds and deposits with financial institutions, were Rs 1,739 crore and we continue to be a debt-free Company."

Tejas Networks designs, develops, manufactures and sells high-performance telecom and networking products, which are used to build high-speed communication networks.

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