Tejas Networks share price may see 22% more upside, says Emkay Global as it initiates coverage with a ‘Buy’ call
₹887.95 apiece on the BSE. Emkay Global Financial Services has initiated coverage on Tejas Networks with a ‘Buy’ recommendation and DCF-based target price of ₹1,050 per share, implying 14.3x P/E (Dec-24E).
The target price implies an upside of 22.7% from Tuesday’s closing price. Also Read: Kansai Nerolac Paints share price jumps over 9% to hit 52-week high on plans to monetise land parcels for ₹726 crore Tejas Networks, India’s largest R&D-driven telecom equipment company, designs and manufactures wireline/wireless networking products.
“Tejas is expected to benefit chiefly from Government of India’s emphasis on domestic manufacturing and the PLI scheme; large spends on BSNL, BharatNet and the Railways; increasing demand in critical infra/India private sector; and global move to replace Chinese telecom equipment," Emkay Global said in a report. Tejas Networks has an order book of ₹9,270 crore as of Q2FY24-end.
Further, the brokerage sees the company bagging some more POs in the next two years. (Exciting news! Mint is now on WhatsApp Channels Subscribe today by clicking the link and stay updated with the latest financial insights! Click here!) Overall, Emkay Global expects Tejas Networks to execute orders worth at least ₹29,200 crore over FY24-28E, and generate revenue and EBITDA above ₹30,000 crore and ₹6,000 crore, respectively, led by the BSNL and BharatNet projects.
It sees revenue peaking at around ₹10,000 crore in FY25E and later settle at elevated levels ~5x FY24 levels. Also Read: SJVN stock jumps 4.4% after company bags 100 MW solar project The brokerage expects the company to benefit from cost-competitive R&D versus peers, asset-light model with EMS partners, Saankhya Labs’ acquisition for wireless solutions, CEO
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