Why is Tejas Networks falling/rising?

Recent Price Movement and Market Performance

Tejas Networks closed at ₹470.50 on 09 December, down by ₹1.25 or 0.26% as of 9:08 PM. The stock has been under pressure for the past five consecutive trading sessions, losing nearly 9.85% over the week. It also hit a new 52-week low of ₹456.10 during intraday trading, marking a significant technical weakness. The stock’s performance today lagged behind its sector by 1.68%, reflecting broader investor caution.

Further compounding concerns, Tejas Networks is trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling a bearish technical setup. Despite a rise in delivery volume to 3.38 lakh shares on 8 December, which was 4.71% higher than the five-day average, the increased investor participation has not translated into price support.

Fundamental Weaknesses and Financial Results

The primary driver behind Tejas Networks’ share price decline is its deteriorating financial health. The company reported a sharp fall in net sales by 90.69% in the quarter ended September 2025, with net sales plummeting to ₹261.82 crore. This steep decline in revenue has severely impacted profitability, with the company posting an operating loss and a negative operating profit to interest ratio of -3.48 times, indicating an inability to cover interest expenses from operating earnings.

Profit after tax (PAT) for the quarter was deeply negative at ₹-307.13 crore, a staggering fall of 211.6% compared to previous periods. This marks the second consecutive quarter of negative results, signalling persistent operational challenges. The company’s return on equity (ROE) averaged only 2.99%, reflecting low profitability relative to shareholders’ funds.

Additionally, Tejas Networks carries a high debt burden, with a debt to EBITDA ratio of 12.63 times, highlighting a weak capacity to service debt. This elevated leverage increases financial risk and dampens investor confidence.

Long-Term Underperformance and Market Comparison

Tejas Networks’ stock has significantly underperformed market benchmarks over multiple time horizons. Year-to-date, the stock has declined by 60.27%, while the Sensex has gained 8.35%. Over the past year, the stock has lost 64.79%, contrasting with a 3.87% gain in the Sensex. Even over three years, the stock’s return of -24.18% falls short of the Sensex’s 36.16% appreciation.

This underperformance is compounded by the company’s negative operating profits and declining earnings, which have fallen by 189.6% over the past year. The stock’s valuation appears risky compared to its historical averages, reflecting investor concerns about the company’s long-term viability and growth prospects.

Investor Sentiment and Outlook

Investor sentiment towards Tejas Networks remains subdued due to the company’s weak fundamentals and poor recent results. The stock’s liquidity is adequate for moderate trade sizes, but the persistent downtrend and negative financial indicators suggest caution. Promoters remain the majority shareholders, but this has not been sufficient to stabilise the stock price amid operational losses and high leverage.

Given the company’s ongoing challenges, including a sharp decline in sales, negative profitability, and underperformance relative to broader indices, the stock is currently viewed as a high-risk investment. Market participants are likely to remain cautious until there is clear evidence of a turnaround in financial performance and operational metrics.

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