Bsnl 4g Delays Hit Tejas Networks & Tcs Profits

Tejas Networks’ stock dropped after reporting a sharp profits decline due to hold-ups in a BSNL 4G task purchase order, affecting its financials. TCS, additionally reliant on the BSNL offer, experienced an earnings dip due to the task’s stagnation, highlighting the contract’s substantial impact on both Tata Group firms.

Tejas Networks’ stock plummeted after reporting a sharp profits decline due to hold-ups in a BSNL 4G task order, affecting its financials. The firm’s revenue fell significantly, bring about enhanced losses. TCS, likewise reliant on the BSNL offer, experienced a revenue dip as a result of the task’s stagnation, highlighting the contract’s considerable impact on both Tata Team companies.

BSNL 4G Contract Impact on Earnings

The 24-month contract for establishing 100,000 4G websites had actually boosted earnings of both business. TCS had been an outlier earlier, recording development because of the BSNL offer, also as its abroad income was declining when faced with macroeconomic headwinds. In the case of Tejas Networks, almost 60%-80% of its earnings had actually hinged on the BSNL contract, growing in triple figures quarter-on-quarter.

After the project ended in May, BSNL granted a Rs 2,903 crore add-on purchase order to TCS for setting up additional 18,685 4G websites. Tejas Networks, consequently, was granted Rs 1,525.53 crore order for providing Radio Accessibility Network tools.

Add-on Orders and Implementation Delays

Nevertheless, the delay in closing the BSNL order has caused expansion of implementation timelines. Consequently, TCS recorded a 3.1% sequential decline in profits, 2.8 percent points of which was attributable to BSNL alone.

“We just got a development purchase order (PO). We are waiting for circle-wise POs. When we obtain it, then the implementation begins,” TCS’ primary monetary policeman Samir Seksaria stated during the firm’s earnings call last week.

After Tata Consultancy Services (TCS) reported a slump in its earnings because of ramp down in state-run Bharat Sanchar Nigam Ltd’s 4G task, the IT solutions leader’s tools vendor Tejas Networks likewise reported a sharp impact, drawing its supply down 10% intraday on Tuesday.

Tejas Networks Faces Revenue Shortfall

“Among the crucial reasons for the shortfall of revenue in Q1 was the postponed receipt of PO and shipment of 18,000 sites of BSNL 4G network, which we were expecting to do in Q1 however has actually obtained delayed a little bit,” Arnob Roy, chief running officer of Tejas Networks, said throughout the telephone call.

Both Tata Group firms have actually been heavily reliant on the Rs 19,000 crore mega bargain which was granted by BSNL in Might 2023– one of the biggest ever agreements for TCS. Of this, TCS had awarded a Rs 7,492 crore order to Tejas Networks for tools supply.

Reliance on BSNL Mega Deal

In the instance of Tejas Networks, virtually 60%-80% of its revenue had been dependent on the BSNL agreement, expanding in triple figures quarter-on-quarter.

The leading administration of Tejas Networks, a Tata Group firm, claimed on a profits call late Monday that while an add-on order was signed with BSNL for an added 18,000 4G websites, the order didn’t come with in the April-June quarter, dragging its income down 89% quarter-on-quarter and widening its bottom line to Rs 194 crore.