Tejas Networks - A destination for high speed technology: Angel Broking

Views of Mr. Jaikishan J Parmar(Research Analyst - Mid-Caps, Angel Broking):

"Tejas Networks Ltd (TNL) is an optical and data networking products company. It designs, develops and sells products to telecommunications & internet service providers, utility companies, defense companies and government entities in India and over 60 countries. TNL derives 63% of its revenues from domestic markets, while rest comes from international markets.

Outlook and Valuation: TNL has reported strong revenue CAGR of 24.2% CAGR over FY2013-17 and PAT of INR 64cr in FY2017 (loss of INR 79cr in FY2013). The RoE improved from 8% in FY2016 to 12.9% in FY2017, primarily owing to ongoing capex on Optical Network by Telcos, strong operating leverage with asset light business and strong professional team with significant industry experience. At the upper end of the price band, the pre-issue P/E works out to be 29.3x its 2017 earnings, 3.7x of FY2017 Book Value. Moreover, the company's debt free balance sheet post IPO coupled with the government's push for digital India would support the growth momentum. Thus, we recommend a SUBSCRIBE on the issue."

Source : Equity Bulls

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