Tejas Networks expect Q2 will be much better than Q1, said, Sanjay Nayak, managing director (MD) and chief executive officer (CEO) of the company. Tejas has bagged a slew of new orders including a Rs 32 crore order for a state-led BharatNet project, another one from Sterlite Technologies and L&T Construction for fibre to home equipment. Last month, the company also bagged a Rs 66 crore order from L&T Construction for a defence project.

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“Q2 will be much better compared to Q1 as well as hopefully on a year-on-year (YoY) basis,” he said. According to Nayak, they are benefitting from a surge in home fiber network and global diversification of supply chains.

“There are two factors that are driving our business in terms of revenues. Number one, with people doing work from home and learn from home, the data demand in-home broadband has significantly increased in the world. The second thing is that because of all the geopolitical tension between the US where they have banned all the sale of chips to Chinese companies, globally we are seeing a surge in traction for operators to diversify their supply chain or suppliers from China to other countries. We are getting a significant benefit out of it. So, those two effects on a global basis is starting to play out starting from Q2,” he said.

However, the roll-out by clients still a bit slow, said Nayak. “There is a little bit of slow project execution in the sense that we are not facing execution, but the people that we will supply our products, they are not able to roll-out the networks because the field people cannot go out as easily as they could. So, there is a little bit of a slowdown from their angle,” he said.

Nayak does expect the company to be profitable this financial year as revenues pick up. “The way our business works and again being a tech product company, our costs are almost fixed which is around 75 percent of the cost of manpower. Once the revenue came down below a certain threshold which is I think around Rs 500 crore, we get into a loss because the rest of the cost is fixed. So, as the revenue pick up, which we expect to happen during the current financial year. There is a fairly good chance we should be profitable in this financial year itself,” he said.

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First Published:Sept 8, 2020 1:18 PM IST