TEJASNET - Investment Analysis: Buy Signal or Bull Trap?

Last Updated Time : 19 Sept 25, 2:16 pm

Investment Rating: 3.2

Here’s a detailed analysis of Tejas Networks (TEJASNET) as a long-term investment

📊 Fundamental Snapshot

Valuation

P/E Ratio: 62.0 vs Industry PE of 55.9 — highly overvalued.

PEG Ratio: 0.49 — suggests reasonable valuation relative to expected growth, but must be viewed cautiously due to recent losses.

Price to Book: ~2.8 — moderate premium.

Profitability

ROCE: 15.4% — decent capital efficiency.

ROE: 12.6% — acceptable but not stellar.

Quarterly PAT: -₹194 Cr. vs -₹62 Cr. — worsening losses, a major concern.

Dividend Yield: 0.41% — negligible for income investors.

Debt to Equity: 0.88 — relatively high, especially for a tech company.

📉 Technical & Trend Analysis

DMA 50 / DMA 200: ₹615 / ₹774 — trading below long-term average, indicating bearish sentiment.

RSI: 57.6 — neutral zone, no strong momentum.

MACD: 2.13 — mildly bullish crossover.

Volume: ~50% of 1-week average — declining interest.

52W Index: Just 7.97% of its 52-week high — deep correction phase.

🌐 Market Sentiment & Forecast

Analysts expect Tejas Networks to benefit from 5G expansion and its Tata Group merger, which could open new markets

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Long-term forecast suggests a potential rise to ₹757 by 2030 — ~23% upside over 5 years

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However, recent performance has been poor, and the stock is in a bearish cycle

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💡 Ideal Entry Price Zone

Entry Zone: ₹540–₹580

This range offers proximity to 52-week low and better margin of safety.

Avoid entering above ₹650 unless profitability stabilizes.

🧭 Exit Strategy / Holding Period

If you already hold TEJASNET

Holding Period: 3–5 years, only if you believe in its strategic turnaround via Tata Group and 5G tailwinds.

Exit Strategy

Fundamental Trigger: Exit if losses persist for 2+ quarters or debt increases further.

Technical Trigger: Consider trimming if price rebounds to ₹800–₹900 without earnings support.

Re-entry: Only if PAT turns positive and ROE improves beyond 15%.

🧠 Final Verdict

Tejas Networks is a speculative long-term bet with potential upside from strategic partnerships and sector tailwinds. However, current financials are weak, and valuation is stretched. Suitable only for high-risk investors with a long horizon and belief in turnaround potential.

Sources

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walletinvestor.com

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shareprice-target.com

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