Imp points Tejas Q3 concall:
• 15 Crs of charge this quarter is non cash charge of RSU issued to Saankhya employees
• Analog semiconductors lead time is >52 weeks, even digital semiconductor chips supply chain issues are faced. Costs have cooled down in general category for specialized components like in our category cost remains same
• Q4 is historically better & we expect Q4 to be stronger than Q3 this time also
• Wireline business will go next year internationally – this year not closing orders due to supply chain issues as wont be able to commit on orders received
• 70 % order backlog to be executed by next FY
• Should see significant improvement in profitability from as early as next year
• For wireline business expect GM to come to historical levels by next year, wireless being new segment GM will be lower. Volume gains should offset GM loss
• Under design led PLI scheme have potential to reap benefits of 2800CR in next 5 years – subject to achieving terms (Investment commitment 750cr)- have not considered any of these in our guidance- business should be profitable at core level
• Margin pressure in Q3 is due to forex fluctuations on orders booked previously
• Inventory increased by Rs. 95 Cr during Q3-FY23
• With a healthy order book of Rs 1,431 Cr and good visibility of new order pipeline (both in optical as well as 4G), we expect to significantly accelerate our quarterly revenue growth
• We continue to increase our investment in R&D, to accelerate time-to-market for our 4G/5G products
• We have scaled-up our manufacturing capacity and are well geared to execute large pipeline of orders
• Saankhya Labs integration is progressing well
• Our healthy cash position at Rs. 1,221 Cr, with an additional infusion of Rs 300 Cr from Panatone, will further strengthen our balance sheet to execute large opportunities and scale-up our business.
• Net Revenue: Rs. 275 Cr • Loss After Tax: Rs. 11 Cr • Cash and Cash Equivalents at: Rs 1,221 Cr (no debt) • Order book at end of Q3: Rs. 1,431 Cr
• Key highlights • Optical business: strong business momentum continues. We are L1 in a large pan-India backhaul tender, winning against global MNCs, which will have significant revenue potential during next FY
• Wireless business: we are well positioned to win a large 4G project for which firm orders are expected soon.
• R&D focus: We continue to increase our R&D investments, with Increased focus on 4G and 5G. Out of total employees’ strength of1250, more than 800 employees are in R&D (YoY 60% headcount increase).
• Supply Chain/Manufacturing: • We continue to be supply-constrained for fulfilling customer orders due to shortage of certain chips
• We have taken advance inventory procurement actions to fulfil current and expected orders, since the lead-time of some of the semiconductor chips continues to be more than 52 weeks.
• We have signed 3 new EMS vendors and have significantly ramped-up our production capacity, so as to ensure timely delivery of large impending orders.
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