Tejas Networks – Product based IT business in a favored sector?

I have a simple hypothesis, and I could be totally wrong here.

GoI allowed Tata’s to use BSNL as a playground by infusing truckload of public money for 4G/5G upgrade.

Why?

BSNL will potentially get a new life, India sort of becomes self-sufficient on telecom tech, and Tata gets a massive case study which they can use to market around the globe. Win-win situation for all.

Here is the thing though. Top line may look huge in coming quarters but it is unlikely that they would make a huge margin. If I am sitting on the GoI side negotiating and giving Tata group an opportunity of lifetime, I would squeeze every penny I spend. Imagine without BSNL, how hard it would have been for Tata group to get an order of this scale.

BSNL if successful will leapfrog Tejas, and that’s what make it a great future investment. BSNL implementation is just a stepping stone, and not a major money making deal.

Disc: Invested for long term in mind.