Not TCS, Tata Steel or Titan, this Tata Group stock surges over 80% in 7 months

From Tata Consultancy Services (TCS), Tata Steel, Tata Motors, to Tata Power, all Tata group stocks have given positive returns so far in the calendar year 2023. With a strong return of 83% in the last eight months, Tejas Network, a lesser-known or the hidden Tata Group company, has emerged as one of the top gainers in the list. The share price of the broadband, optical and wireless networking company touched a lifetime high of ₹935 in intraday trade on the BSE today, staging a strong rebound from its 52-week low of ₹510.05 touched on January 30, 2023.

Shares of Tejas Networks rallied as much as 4.7% in intraday trade on the BSE today after the company informed exchanges that it has received an advance of ₹750 crore from sister company TCS for the BSNL project. The fund will be mobilised towards the supply of radio access network equipment for BSNL’s Pan-India 4G/5G network.

“Further to our letter dated August 16, 2023, we have received today (September 07, 2023) the mobilisation advance of ₹750 crore from Tata Consultancy Services Limited, towards supply of Radio Access Network equipment for BSNL’s Pan-India 4G/5G network,” Tejas Networks said in a BSE filing on September 7.

On August 16, 2023, Tejas entered into a deal with TCS for supply, support and annual maintenance services for Radio Access Network (RAN) equipment for BSNL’s Pan-India 4G/5G network. The total value of the deal is ₹7,492 crore, which involves supplying 4G/5G RAN equipment for approximately 100,000 sites. The contract will be executed during the calendar years 2023 and 2024.

Tejas Networks designs and manufactures high-performance wireline and wireless networking products for telecommunications service providers, internet service providers, utilities, defence and government entities in over 75 countries. Tejas Networks is a part of the Tata Group, with Panatone Finvest Ltd. (a subsidiary of Tata Sons Pvt. Ltd.) being the majority shareholder.

Tejas Networks shares gained momentum after Tata Sons acquired a controlling stake in the company. In July 2021, Panatone Finvest signed a definitive agreement to acquire a 43.3% stake in Tejas Networks for nearly ₹1,850 crore. As per the latest shareholding pattern available on the BSE, Panatone Finvest holds a 55.97% stake in the company.

With a market capitalisation of ₹15,325 crore, the share price of ace investor Vijay Kedia-backed telecom gear firm has risen over 250% post stake buying by Tata Group. It has given 42.6% returns in the last one year, while it climbed 49% in the calendar year 2023. In the past six months, the counter added 44%, while it rose over 8% in a month.

For the April-June quarter of FY24, Tejas Networks reported a net loss of ₹27 crore, compared to a loss of ₹11.5 crore in March FY23, and a loss of ₹6.3 crore during the same quarter last year. The net revenue stood at ₹188 crore in Q1FY24, up 46.3% from the year-ago period, while it declined 37% sequentially.

DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.