Tejas Networks share price may see 22% more upside, says Emkay Global as it initiates coverage with a ‘Buy’ call
Tejas Networks share price gained over 3% on Wednesday after brokerage firm Emkay Global initiated its coverage on the stock. Tejas Networks shares rose as much as 3.78% to ₹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.
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.
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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.
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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 Anand Athrey’s 35-years’ US-based work experience and new reference opportunity from Tata Group companies.
Tata Group’s semiconductor foray could give an added boost, it said.
Tejas Networks share price has gained just over 7% in the past one month and the stock is up 51% year-to-date (YTD). However, Tejas Networks shares have given multibagger returns in the past three years as they have rallied more than 571% during the period.
At 12:10 pm, Tejas Networks shares were trading 1.85% higher at ₹871.40 apiece on the BSE.
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Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Published: 27 Dec 2023, 12:11 PM IST
