XTRAS: Tejas Networks focuses heavily on R&D. It has won several awards in that category including National Intellectual Property (IP) Award 2017 as “Top Indian Private Company (MSME) for Patents and Commercialization.
SWOT ANALYSIS
Strengths
• The company's diverse product line can help expand its customer base and compensate for losses in one product area with gains in another.
• The well-developed and efficiently integrated IT infrastructure can improve the operational efficiency.
• Strong cash generating ability from its core business.
Weakness
• The lack of cash or insufficient current assets has a detrimental impact on the liquidity situation and the overall success of the company.
• When compared to the product/service attributes, the business's prices may not appear to be justified. It indicates that the pricing approach should be revised.
Oppurtunity
• orizontal and/or vertical integration can improve control over the entire value chain, resulting in better raw material availability and faster product delivery to the end customer.
• The development of new technologies to help in the production and distribution of products and services can be used to incorporate innovation within corporate processes.
Threats
• The growing environmental sustainability trends act as a major threat when offered products/services are not environment friendly which draws the negative publicity and criticism and can affect the brand image in a competitive market.
• De growth in revenue, PAT in last 2 years. Inflation raises the cost of production and has an impact on corporate profitability.
FUTURE PROSPECTS
• Tejas Networks sees a very large opportunity in the telecom sector both in India and global markets with the new cycle of investments in 5G and fiber-based broadband rollouts. Tata Sons subsidiary has recently acquired 26% stake in Tejas Networks will be utilized organically and inorganically in the research & development, sales and marketing, people, infrastructure and to enhance its manufacturing and operational capabilities to cater to this large market opportunity, and for other general corporate purpose.
• Promoter holding has increased by 37.32% over last quarter.
• Expected return of -54.36% from current price level is less than last 3 year CAGR of 5.83%
• Company has high debtors of 230.26 days.
• Company has a low return on equity of -1.01% for last 3 years. Hence, the stock might not perform well as it shows downtrend.
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