Shares of Tejas Networks Ltd slumped by 20% on Thursday after the telecom equipment supplier reported a drop in profit for the first quarter (Q1) which ended in June.
Company’s first quarter profit tumbled by 87% to Rs 5.77 crore compared to Rs 45 crore for the first quarter of 2018-19. Total revenue also declined by 32% to Rs 162 crore due to deferment of spending on government projects.
Earnings before interest, tax, depreciation and amortization (EBTIDA) for the June quarter fell by 61% year-on-year to Rs 24.19 crore against Rs. 62.51 crore a year ago. Operating margin also contracted sharply to 4.2% from 19.5% in the first quarter a year-ago.
As government business accounted for 15% of the total revenue, Tejas Networks CEO Sanjay Nayak said, “To de-risk our business, we aim to increase international revenue contribution to at least
50% of total revenues in medium term.”
In an all-time low, Tejas Networks stock was locked in lower circuit at Rs 103.15 on Thursday. The stock had got listed on bourses on 27 June 2017, after the company launched an initial public offer (IPO) by issuing shares at Rs 257 apiece. Tejas Networks shares have since lost over 54% of their value.
According to the company website, Tejas Networks is India's largest R&D-driven telecom equipment company with around 700 employees. Tejas designs and manufactures fiber-optic networking equipment, broadband wireless and data networking products used by telecom service providers in more than 65 countries globally.
Tejas products are used by telecom service providers, utility companies and the government.