Tejas Networks Limited ($TEJASNET)

Ladies and gentlemen, good day, and welcome to the Tejas Networks Limited Q4 FY '26 Earnings Conference Call hosted by ICICI Securities Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Mohit Mishra from ICICI Securities Limited. Thank you, and over to you, sir.

Yes. Thank you. Good evening everyone. Thank you for joining on the Q4 FY '26 Results Conference Call of Tejas Networks Limited. We have the management with us of Tejas Networks on this call represented by Mr. Arnob Roy, Executive Director and COO; Mr. Sumit Dhingra, CFO; Dr. Kumar N. Sivarajan, CEO; and Mr. Sanjay Malik, Chief Business and Strategy Officer. I would like to invite Mr. Arnob Roy to initiate with opening remarks, post which we will have a Q&A session. Thank you, and over to you, sir.

Thank you, Mohit. Good evening, and welcome, everyone, to our quarterly earnings call presentation. So at the outset, let me sincerely apologize for the delay. We have a delay of an hour. We had a lot of technical problems uploading other materials to the saves site and that largely caused the delay. So once again, I sincerely apologize for the delays from the start of the conference. So let me begin by walking you through the Q4 financial numbers. So in Q4, we had a revenue of INR 333 crores as opposed to INR 307 crores in Q3. And for the year, we had revenues of INR 1,103 crores. We had a net PAT loss of INR 211 crores in Q4 as opposed to INR 197 crores of PAT loss in Q3. And for the entire year, we had a PAT loss of INR 909 crores. We had a growth in order book at the end of Q4. We ended with INR 1,514 crores at the end of Q4 as opposed to INR 1,019 crores at the end of Q4 of FY '25. So from a revenue mix, India once again dominated our business, 88% India. And from order book, also, it was very similar, where it was dominated by for the India business as far as bookings are concerned. So even though we made initial business, wireless business with customers, our quarter revenue was driven largely by the sale of wireline products to India private and international customers. And as I mentioned, we had a significant order book year-on-year growth. So I would like to now hand you over to our CFO, Sumit, for taking you through the financial numbers in detail.

Good evening, everyone. The revenue for the quarter 4 was INR 333 crores compared to INR 307 crores in the previous quarter. Quarter-on-quarter growth of 8%. EBIT for the quarter was negative INR 219 crores as against INR 239 crores in the previous quarter. And profit after tax was INR 111 crores compared to INR 197 crores in the previous quarter. The full year revenue was INR 1,103 crores and profit after tax was negative INR 909 crores. Inventory at the end of the quarter stood at INR 2,438 crores compared to INR 2,363 crores in the previous quarter. Receivables at INR 3,258 crores and payables at INR 478 crores. The cash position at the end of the quarter was INR 505 crores and net debt of INR 3,531 crores. At gross level, the borrowings were INR 4,035 crores at the end of the quarter. . And I'll ask Arnob to take over the next stage.

Thank you, Sumit. I'd like to add some color to the business that has happened for Q4 and also have a review of our business during the year. So during the quarter, some of the significant things that happened in our wireless business was signing an agreement with ADC to manufacture and supply of 5G Massive MIMO radios for a global customer. The other significant thing was we received an initial order for the expansion of 4G networks for the customer in South Asia. And we have multiple ongoing field trials for our 4G and 5G RAN products across South Asia and the Americas, and we recently successfully completed our 5G POC in South America. For our wireline business, in the quarter, we completed the shipment of a significant number of IP/MPLS orders to BharatNet Phase 3. As you know, we are the largest suppliers in terms of number of circles for BharatNet Phase 3. And a significant amount of shipment and many of them, several sites are now carrying live trial. We supplied major amount of 100 gig and 40 gig WDM systems to our Tier 1 telco in India for their 5G backhaul network for the enterprise services and also for their services for hyperscaler data center connectivity. We were selected to build our nationwide network of multi-terabit WDM network for a hyperscaler data center application in India. And it was a proud moment for us for a very famous global sporting event, we implemented the backbone network of multi-country network for this event using our state-of-art WDM network. This was a global sporting event which happened recently. Other highlights during the year, our products got reined telecom for our innovative satellite SatCom IoT solution. And we also won the prestigious Golden Peacock Awards for our 5G brand solutions. We launched our state-of-the-art ultra compact and hyperscale data center interconnect product at MWC at Mobile World Conference in Barcelona to launched by the Honorable Minister of Communications. We filed 63 patents in Q4 in bringing the cumulative count to [ 676 ] out of which, 371 has been granted. We also received incentives for FY '25, operational INR 69 crores, reaching a total of INR 467 crores for FY '25. A few corporate updates for the year. We had some changes at the Board as well as our senior management. So we appointed Mr. Shiv Kumar, Vijay Sekaran, as additional Director non-executive and independent director of the company, which take effect on April 15, subject to the approval of shareholders. And Mr. Shiv Kumar is a charter accountant with over 40 years of experience covering audit and assurance services, including 8 years as COO at Deloitte. Mr. P.R. Ramesh, who was an independent director of the company, resigned and effective closing business as of April 18. And so Shiv Kumar has taken over his is spot as the Independent Director of the company. I have been appointed as the executive -- I was -- I'm currently the Executive Direct and Chief Operating Officer, has been appointed as the Managing Director and CEO of the company from effective today until 2028 and this is subject to the approval of the shareholders of the company. Two more updates. Mr. Pritam Mutha who is currently the piece of product line management of the company has been appointed as the Chief Operating Officer of the company's effect from today. Mr. EVS Prasad, who is currently the Financial Controller of TDS has been appointed as the Chief Financial Officer of the company with effect from 16th of May, and Mr. Sumit Dhingra, our current CFO, has resigned from the services of the company, but it will be effective from the close of business hours on May 15. So quick review of FY '26. So this year has been a year of consolidation for us. A lot of the technology and products that we developed over the last 3, 4 years. Our [indiscernible] achieved commercial scale and deployment at a global scale. The BSNL 4G, 5G network went live across 100,000 sites and were launched by the honorable Prime Minister in 2025. We deployed our largest integers router networks in the country through BSNL 4G backhaul network the man network as well as in the -- for the BharatNet Phase 3 networks. We -- we had a very successful global rollout of our WDM products, with 400 gig and 800 gig wave line services, both in India as well as internationally. And we also continued the deployment of the world's largest satellite IoT network, with the vehicle tracking system solution. We continue the innovation journey with our new products and technology launches. We launched our 64TR Massive MIMO, 5G radio during IMC at Indian Mobile Congress and was launched by the honorable MOC. We lost our WDM system, our CS L-band, capable WDM system with 76 terabits of data over a single pair of fiber. That was launched during IMC by [indiscernible]. We launched our cloud native converged 4G 5G core also during the year and undergoing trials at multiple locations across the world, multiple -- across multiple customer networks. And at NWC during the year last year, we launched our hyperscalable data center interconnect platform, which over a very compact form factor launches over 50 terabits of data. in a single point. And we also talked about the patents filed during the year, 147 patents are filed in FY '26 and 150 contributions to the 3GPP standards, the evolving 3GPP standards. Last year, we announced strategic partnerships with NEC and Rakuten and the last financial year. We kind of spent develop these partnerships further after we signed off a contract for the supply of Massive MIMO radios with NEC for an international deployment. And with Rakuten Symphony, we have partnered with open RAN solutions, and we have multiple ongoing POCs across the world, and one of them was completed successfully very recently, significant achievement was we're expanding our wireless footprint, both in India as well as internationally. We covered geographies about -- and the 2 deals we talked about are the 5G Massive MIMO radio for the global customer and the open RAN deployment. We also signed up several new applications. We do successful POCs for 5G private networks and also the 5G RAN pilot for the coverage network. So looking forward for future business outlook. One of the -- we see that AI is going to be one of the driving -- one of the killer applications which are going to drive the mega trends for network transformation, both in terms of the traffic in the network as well as transforming of the network architecture. So with the rapid adoption of AI applications, by 2023, AI traffic is trade to be more than 60% of our total network that will be running on the traffic. We'll have more than 100 million physical AI machines connected to the network by 2035. The profile of traffic is going to change dramatically from the today's downstream heavy traffic to upstream traffic where upstream traffic will outpace the downstream traffic networks, the traffic that is of today, and that will require significant network transformation. Most enterprise will adopt the AI heavily with running GenAI workloads of the cloud. And this is also going to drive -- from the traditional compute cloud-based traffic that the access is going to get transformed to an AI-based in access from the cloud. So with this trend, the AI, this is going to drive a network infrastructure build super cycle. And it basically means that the current communication service provider network, the CSP network not be sufficient to handle the traffic growth in the coming years. And the transformation that will happen is that those 50% of the new air traffic would be processed at the edge nodes, where edge inferencing is going to play a big role in the architecture of the global AI networks. There will be significant investment in new networks with 400 gig, 800 gig connectivity even at the access and at the edge to cater to the significant traffic growth. And AI is also expected to accelerate the adoption of and AI technology will be natively embedded in the RAN and edge and core of the network. So our business impact, you'll see a lot of the convergence of not in the access and backhaul but also it will convert with compute at the network is to support the edge AI infrastructure and the edge inferencing workloads in the network. There will be significant scaling up of our optical solutions and package switching and routing and converging with the compute in the edge and access networks. And the data center connectivity will go to multicavity scale, which is already scaling up to that level, but it's going to scale up significantly to provide for the AI cloud interconnect. So we have built our current platforms to -- which will scale very efficiently for the networks of the future to handle traffic capacities as well as traffic characteristics of future networks, our lead generation 5G products are being designed to scale and evolve into 5G advance and products. with higher up, supporting much higher upline capacities. Our high-capacity optical, which is for 1.2 terabit per channel is going to scale to 1.6 terabit and beyond to support the fab-scale data center connectivity of the future. Our edge multi-terabit as note is going to, again, scale in capacity and interface and also want to integrate with compute capacity and complete infrastructure to support AI applications. And our next-generation access will evolve supporting further convergence of wireless and wireline access solution. And AI will drive upgrade in our network management all across driving automation for driving our network management and fall prediction and network configuration and driving a huge amount of automation and optimization of the network. So the key takeaways for FY '26 that this has been a year of consolidation and transformation for us. We did our technology that we have developed in the past with commercial scale of deployment in very large networks. We expanded our portfolio significantly and launched several state-of-art products in wireless and wireline. We have several international wireless wins. There will be a starting point of our international expansion for wireless business. And we made progress with the initial strategic partnerships that we had launched with our -- with several global partners So we are well positioned for long-term success. From an industry point of view, we see AI that will drive a lot of demand for network build-out and as a result for our equipment as well. We have a product road map, which is well positioned to leverage the future opportunities that we see. And we have strong partnerships in place to expand our global customer footprint. So before I end the presentation, I do want to make a few comments about the financial results in FY '26. As we mentioned, this has been a year of transition for us after the execution of the massive BSNL projects in FY '25, which gave us a significant amount of revenues. And we needed a runway in FY '26 to consolidate and transition our business beyond BSNL and several large customer projects that we were actually planning for both for wireline and wireless products have got delayed, which resulted in significant revenue shortfall and the resulting financial loss. However, we have not cut down on the invents during the year because of our outlook for the future. and the industry trend that we see. Based on our FY business outlook, we believe that our -- with our current investments and cost structure, we will be able to achieve better financial results. And net-net, while it has been a tough year for us business-wise much has been achieved to set up from a path for the future. With that, I come to an end to our introductory remarks and open the floor for Q&A.

[Operator Instructions] Our first question comes from the line of Shailesh Jha Girdhar from Investa.

Am I audible?

Yes, you're audible, Shailesh.

So my question is that in February, we got a Massive MIMO for 5G networks and also 4G network -- a deal for 4G network in South Asia. So is there any data for quantify these orders or deal so that we can consider the future outlook of this deal? How it will affect the revenue in the financials and the time line of this project?

So Shailesh, typically, we don't go into specific deal numbers and all. But a lot of the Massive MIMO -- 5G Massive MIMO business will actually get revenued over the coming -- this current financial year in FY '27. Some of the revenue of the 4G deal happened in the past financial year, and we expect more expansion on that during the current financial year. But beyond that, we do not share the specific numbers or any project.

Okay. And my second question was the BSNL additional PO of 10,000 sites around -- so the same view is delayed or -- and is there any update on that? .

Yes. It is -- this is Sanjay Malik. So thanks for this question. So yes, it is the same add-on PO, which has been there. So the active discussions are still going on with the BSNL team on the sites on which they have to have these 4G sites and the configurations. So that discussion has been happening and quite active discussion. We are still keeping our inventory here for delivering these sites and quick turnaround once we get the -- but yes, as of now, that is tons up definitely on.

Just to add on so we have inventory. So the time line for that order will be pretty much less than the previous BSNL...

Sorry.

So we have the inventory for the upcoming CEO of BSNL. So the time line, I just want to ask that the time line would be much lesser than the all...

That's right. That's right. So because one thing is that now the sites are commercial. So it's already tested out. So once we receive the order, we have the inventory, so definitely, the delivery time would be much faster.

Your next question comes from the line of Pranav Kshatriya from Emkay.

My first question is regarding the order book. I mean this INR 1,500-odd crores order book, you said almost 83% of that is coming from the India business. Does that include the BSNL 4G project as well?

No, it does not include the BSNL 4G project.

This is purely BharatNet and other private telco whatever you might have.

Yes, our customers, both in India as well as international for our wireline and wireless business, but doesn't include the BSNL 4G at all.

And should we assume that most of this will be sort of executable in this year itself? And hence, product that revenue should be somewhat similar, if not higher than this number. I'm asking direction not the exact number.

Yes, a good portion of this will be revenued in this coming financial year.

Okay. And second question is regarding the cost of goods sold. So the memory prices have gone up, does it impact the margins for your product at all.

Yes, there is the cost of memory does impact the cost of our products, even though it's -- even though it's a small component of our product cost, usually -- those are much smaller compared to the much more expensive Class A equipment that we use for network processing for for optics and all those kind of things. But yes, the cost and also the lead time is also a challenge for us. And we are addressing this in multiple ways. So there are newer products, newer technologies that are out there, and we will be addressing that. And also as a part of the increase, we are also renegotiating our cost, our prices with customers as well as for the new opportunities which are out there to make sure that our -- we protect our margins.

Okay. Because -- I mean, the purpose to ask this question was to understand how much should we expect the margin compression at the contribution margin level because it's not only the memory even the chip prices have sort of in stock because the demand for chips has also been higher. So can you give some qualitative our quantitative number that how much could be the impact on the margins?

Yes. As I said, if you ask the specific memory where the increase has been the largest, right? I mean other increases selectively has not been as dramatic as memory. But thankfully, memory is only of a small portion of our value. As you know, it's like high volume component. So even a large memory and the cost of those that are not very high compared to the several thousand dollars of on cost that we -- the cost that we have of our product, right, upwards of many thousands of dollars. So it's a very small component. But nevertheless, I think we are kind of making sure it is accounted in our cost. And we -- and basically renegotiating and reoffering new prices with the escalation to make sure that we protect our margin. And the same holds for other cost escalations, which are there, which are far more controlled and also in very controlled by way because in the sense that because we also have long-term pricing contracts with our suppliers also, right? So those transitions happen very slowly, and we have the window of negotiating prices on any new deals that we signed to account for the cost affiliation.

Sure. Last question from my side. Since you're not giving the revenue guidance as such, I mean last year you did give revenue guidance. How should we look at the revenue growth for FY '27 and margin given various any quantitative, qualitative color will be helpful?

Yes. Pranav, we've never given revenue or any other financial number guidance in the past. And so I think we have to -- we will stick to that. I mean, we are not in a position to give any new guidance. However, as I said, we are -- we have a stronger business outlook. And that's why I talked about that with all the investments that I have made. And with our positive business outlook, we have continued the investment during the year, even though business didn't materialize because we figured out that the instruments in product evolution and building the new technologies was very important for our future business growth. So we continue on that. So obviously, our outlook is positive, very positive for the future, and we expect to see growth. But as a practice, we've never quantified in terms of numbers.

Our next question comes from the line of Ritesh Poladia from Girik Capital.

Question is on balance sheet. There's a good increase in into under development from INR 400 crores to [ INR 900 crores ]. What does that pertain to?

So I think intangible under development commonly consists of our product development effort and also related to the IP or the technology license, so that is going to transfer that we did with NEC early part of -- or towards the end of the previous year, and that is partly getting reflected in the intangible underdevelopment.

So that NEC investment was about INR 550-odd crores. Everything has been done or still it is to be done?

A large part of it is done. I think it is linked to milestones. And I think balanced milestones, we expect to get done within the next 1 or 2 quarters. And with the commercialization of all the investments that we made, which are as part of the intangible assets, all of them will get capitalized as when we have commercial feasibility and commercial adoption of all the new technology and products that we've developed, including this licensing.

And from that IP only, you got this first order from NEC customer?

Well, that was part of the agreement with NEC that we licensed some technology and we built radios for the future okay?

So is this part of the same agreement where you got the first order because the order book is INR 1,500 crores, and 80% is India. So that would be a very small amount, right?

Yes. Yes. As I said, we signed the contract for the supply. And so the revenue for that business will actually happen in FY '27. So it is part of the same partnership even though the 2 contracts are separate. The technology licensing contract and this supply contracts are different completely.

Okay. So when do we see the revenue from this technology agreement.

Yes. No, no. So this new contract with NEC, we'll see the revenue for that in this -- in FY '27 -- during the current financial year.

Sure. Sir, as this comes a bit complex, could you at least give us some sense that what kind of or what amount of opportunities you are chasing right now? And by what time of this will get okay? Or what are the milestones which we can look for it?

Again, on this, definitely, we have been chasing quite large opportunities, both mill, again, from wireless perspective, quite a few of those are international opportunities, which we have built over the last 1 year. And if you would have seen that we have started quite a few trials also. So again, difficult to give the overall size of the funnel number, but it is substantial. And those will be getting again ordered in the coming year and then your revenue booking also should happen from that in the coming years.

Sure. I understand your constrained in commenting further. But just to take it bit forward, will this opportunity will be multiples of what you got in BSNL?

Multiples of what we got in BSNL. The original one, it would not be that 100,000 sites kind of thing, but because that number outside India are a little smaller as compared to the S&L. But I think from our product perspective, reference building perspective, and coming to the international wireless area. I think that would be very significant.

Sure. And regarding R&D plan for FY '27, will it remain in, is there any cut down? Or are you still going strong on your ending investments, whatever you are looking for? .

So we will continue our R&D investments, but obviously, we will tailor it to the business outlook that we have. And obviously, the business maturing. So as a sense, we will be optimizing it to make sure that we get much better financial results. But as of now, we plan to continue with our investments because the business outlook that we see in FY '27 should be -- we should be able to achieve better financial results even with our current investments and cost structure. But we will keep optimizing that as we see the business progress during the year.

Sure. And one final question on receivables. Where do we see this number going in FY '27?

I think on receivables, the 2 points is the number that you see needs to be looked at in context of the corresponding advance that we received as part of the BSNL 4G order, which is currently showing up in current liabilities. Having said that, the -- we expect the collections of the remaining collections of BSNL to significantly happen during this current financial year. So we expect receivables to progressively come down over the next couple of quarters. Obviously, this will also increasingly be a function of also the incremental business scale up that happens over the next few quarters.

Yes, that I understand. But the entire BSNL 4G will be collected in this year? .

A significant portion of that should be connected this year. So that's again also linked to milestones. And those progressively are getting complete, so we expect that to lead to collections over the next few quarters.

Your next question comes from the line of Anish Kumar from Brito Financial Services.

Am I audible?

Yes.

So first of all, I had a complaint like the timing for the con call was 7:15, and we started around 8:15 and the results were -- I mean, the presentation was out at 8:13 or 8:12, so we didn't get any time to read or analyze the presentation before the con calls. And this has been repeated for the past 7 quarters, I requested earlier also that time should be to the investors to analyze and read the report at least, but still the same story.

Yes. I think this time, especially, we had a lot of problems in uploading and that took a lot more time so we had to progress earlier. And again, once again, I apologize for the entire delay and the short window between the upload and the start of this call. We'll make sure that it doesn't happen in the future.

And secondly, sir, congratulations on the patents that you've got in this quarter and the developments that you've got on the product side, will the presentation that you gave was 2 technical for a layman like me, so it sounded like grief and latin for me, but whatever you said, I mean, congratulations that. But as an investor, if we see the financials, I'm pretty pointed with the way Tejas is going, and I believe the shareholders' money is being taken for granted. I do not see any progress in the financials. Even now you are not able to give any kind of clarity on the future that we hold. Pretty bad situation that we are in right now, very disappointed.

I agree to some things. I think, of course, as part of the company's management, I mean it's been disappointing for us also as well. There were a lot of business that, as we said -- as I mentioned, that we had planned for, based on which we have made investments that got delayed. And yes, so we are -- we think that this -- after this BSNL project, this has been a year of transition for us. And going forward with all everything that we have done and invested in that we should be looking at a much more better and predictable financial results going forward.

I just wanted to say, like see our share price has come down from the lifetime high of INR 1,495 to -- it came down in the range of INR 300 also. I understand that market forces are there that drive the share prices apart from the financials. But you should take care about the shareholders' money also and some guidance should be given about the future. This is just my recommendation, rest I leave up to your wisdom.

Sure. we'll take this into account.

The next question comes from the line of Pratap Maliwal from Mount Intra Finance Private Limited.

I am I audible?

Yes, you're audible, Pratap.

I just wanted to have a clarification regarding that earlier participant's question regarding the NEC deal for the supply of the Massive MIMO radio. So is that part of our current order book of INR 1,500 crores? Or is that yet to come in, as you said that it will be revenued out in FY '27. So is that already part of our double?

Okay. So for this deal, actually -- so that basically means that we are entering this account with NEC. So there is the first PO, which has been received, which is part of the INR 1,500 crores. And as we go along there would be -- the purchase orders would come as the rollout progresses through the year.

Okay. And this would be -- can you give us any idea of how we kind of understand that this will scale up because as you're saying that the outlook for FY '27 is that we get some better results this even because FY '26 will be a year of transition. So can you give us some idea on how this is expected to scale up?

You mean this particular deal or the overall business in general?

No, sir. But in particular, the NEC deal because as you're saying that we get some follow-on purchase orders as wet. So what can we expect the scalability to be?

As I mentioned, we...

Yes. So it all basically depends upon the rollout, which the customer does. So as the rollout happens, then the new purchase orders keep coming. So difficult to again give a number projection on it. But I would say, I think the follow-on orders would be again better than whatever we have as of now.

Okay. Now just one thing. When I look at FY '26, we've had a PAT loss of approximately INR 900 crores. For FY '27, you're saying that it will be a year of transition and you get better results, what is our path back to profitability? Can you give us some undemanding on that front?

Yes. I think we expect a much better business in FY '27 based on the opportunities that we see. And with that and with -- we will also manage our cost at the current level and optimize as required to make sure that we get to -- we have a path to profitability because this -- as I said, this has been a one-off year where business got delayed, but we didn't want to compromise on our investments. for the future opportunities. But going forward, I think we will ensure that one part of it is the business which is out there and our cost structure, which is there. They are in line. And we do ex from the business outcome that we see in FY '27, we should end up with much better financial results. And we'll also -- as the business progresses, we will monitor and optimize our costs accordingly.

Are we expecting to be PAT positive in FY '27? .

Yes, we don't give financial guidance, but here's that's the goal.

The next question comes from the line of Darsheel Javery from Crown Capital.

Sir, as I understand you're not going to give any guidance. But with regards to just are the inventories and receivables. So that's putting a series strain on our balance sheet. What is the company's aim regarding that? I understand even if I net off the current liabilities for rebuilt, that still is like nearly double the revenue that what we've done in FY '26. So just wanted to understand like what do we expect out of this. And what is -- as company modeled out if BSNL order is even delayed by another year because that's not in our hands, right? So the PO -- so what is the inventory level will there be deterioration? Will there be some other write-offs that we need to take? So what do you feel is the realistic outlook that we can have with regards to our inventories and this year also?

So I think on receivables, what you clarified in response to the earlier question. We are expecting to get the balance collections from BSNL significantly during this year, and that should lead to improvement from a receivable standpoint. On inventory also, I think, as you alluded to, I think the large part of this is also coming from the advanced procurement action that we took for the BSNL add-on order. Right now, we are -- we continue to be in discussions with them with respect to getting the order. And which is the inventory there is something that gets used in the radios that we sell and do can potentially also be sold to our customers. But I think -- so that's where it is. I think for now, I think we have any further clarity with respect to BSNL add on auto. The inventory for these products, the BSNL 4G products are not unique to BSNL. I mean they are like wide range of radios for 4G and 4G upgradeable to 5G, which are applicable for customers for any kind of customers, right? So many of the opportunities that we are positioning ourselves internationally in the private 4G networks and all those kind of things, all use the same products. So the inventory will also be used for many of those opportunities when they convert. So it's not very unique to BSNL. However, I mean, as you have noted that most of it had been procured for BSNL. So a significant part of it will go along with BSNL add-on order. But independently, they will be consumed along with other business opportunities that we have globally.

Okay. Fair enough, sir. And just another question regarding like a cash generation ability. So -- so even in the current year, I think we've been able to only generate around INR 135 crores of cash. So that takes in account of all the same inventory advances that we've gotten. And on base of that, I think we have invested, I think, around INR 700 crores in intangible assets, right, sir? So majorly, if I'm not wrong, our investment in intangible is debt funded? What is the rationale behind that? Because I don't know if this is sustainable at a certain level, right? So if we are not going to be a positive in FY '27. We are -- we might be funding or intangibles with debt, but it will take such time to get traction, we get orders, we will get minute orders. In that time, I don't want that our company's balance sheet details so much that we have bigger issues than research and development. So any comment on that, sir?

No, I agree with your observation. Other point is that since we are in the deep tech space, being in a situation where you don't invest in technology evolution is a higher, bigger risk for the future of our business than the other way around, right? So from that point of view, we took -- in FY '26, we took the call of that even with the business shortfall that we see with the transition that is happening and with the technology that we needed to develop to leverage the future, that will continue with our investment. And we have done that. And as you see, we have launched many products, which will help us for the business of the future. But I -- going forward in FY '27, as I said, the financial diligence of investments versus returns and revenues and all will be far more tighter because I believe the significant investment has gone in and we have received much of the goals that we had in mind. So in FY '27 and beyond, it will be a more -- much more well-balanced investment that will happen in line with the business outlook, which will and -- also which will continue to evolve and monitor very closely.

Fair enough. Sir, just 1 last question from my answer. Right now, we are at around INR 1,500 crores of order book if you may or any kind of target of the other wins that we want. I'm not saying specifically for this year, maybe with the new technologies over a period of 3 years, what is the target that we can have in terms of order wins because even if some kind of direction we can get like in this, that would be really helpful, sir?

Well, as I said, the investments have been made with an eye of on significant growth because -- and this significant growth will be, of course, over year-over-year numbers and actually got one of BSNL project. Those kind of projects will come, and there will be spikes in our business when they happen. But if you look at the business trend without those one-off projects kind of thing what you see. We will definitely hopefully see business growth on top of what we have seen earlier in and so on. So that's all I can say. I think the overall growth in our opportunities, there will be significant growth in our opportunities. There will be lot of investments happening from operators, from enterprises, from ISPs and so on. And we are well positioned over there. So we -- obviously, this investment has been made with business, which is several multiples of what we have done in FY '26, right? So that's basically the outlook based on which we have made all the arrangements.

The next question comes from the line of Shailesh Jha Girdhar from Invest [indiscernible].

So I was -- I had a question about data center connectivity business. So TCS is actively building the data centers -- actively participating in data centers building. They have a plan of one week ago. So do we have a certain benefits of being a Tata Group company, and we can get a CEO from TCS in somewhere. Do we have a benefit not in terms of amount, but in terms of being a group company, that's what my question was?

Well, I mean, independent of being a group company, we are engaged with not only TCS, but other of these data center builders for our products, and we have seen what a lot of success in optical has been as part of those data center buildouts. So TCS is yes, one of our important customers as well for that for data center applications. And yes, we are closely engaged them with their future business with the future business plans, but I'd like to highlight that they are not the only one for our data center at growth.

The next question comes from the line of Arpit Jain from Wallfort Financial Services Limited.

Yes, we can hear you.

So over the last year, we filled a couple of patents. I just wanted an idea regarding when do this change generates revenue for us and what is the rationale behind filing so many patents. So what's the future outlook regarding this patents?

See, as a deep tech company, we need to file patents to -- one is to protect our inventions so that our innovations are not replicated easily. The second part of this is that, especially in the wireless space, there is a lot of the patents that go into what are called the standard essential patents. These are patients which are used for building the -- as per the new standards of 5G or 5G advance of CC based on 3GPP standard evolution. So as a company and also from our other business, we need this patent portfolio to be both summer part of protection or innovation as well as a defensive portfolio where you would be cross-licensing patents from other companies, which are absolutely essential in nature as far as developing your wireless products and technology are concerned. So these are -- so in summary, both in terms of potential innovations and also for giving us a solid base for being able to cross license patents and technologies with other technology developers. And this is more than a direct monetization of the number of patents that we have. It is monetization in a little indirect way. Yes, we have time for one last question.

Our next question comes from the line of Rajakumar Vaidyanathan from RK Invest.

Yes. Can you hear me?

Yes, we can hear you.

Sir, just a couple of questions. So the first question is, is it reasonable to expect a breakeven in FY '27 on a PAT positive in FY '28?

That's the goal. I mean, we're not yet guidance, but that's where in the world. As I said, FY '26 has been a year of investment and FY '27, we expect to see far better financial results in terms of -- with the business outlook that we have. And with the investments and the excess control that we will have in our -- within the company and the expectation is that the financial turnround as quickly as possible, starting -- starting with FY '27.

Okay. And the second question is on this late DSO that you have with the BSNL L order, so do you expect that along BSNL, even for the order that they are under execution because you still on collected about INR 3,000 crores. So the same issue will happen in the current order as well?

No, you're talking about the collections from the upcoming order at the there for add-on order what you're talking about?

Yes, there are 2 issues. The one whatever that is outstanding that we have shown in as of March '26, what you said that you will be able to collect significantly in FY '27. So my question is the order that you are executing, which is about INR 1,500 crores the orders on hand that you mentioned, right? So there also the DSO will be elongated DSO? Or where do you expect the collections to happen much faster?

Yes. So 2 things. So number one, out of this INR 1,500 crores of order book, BSNL purchase order is still not part of that because as we said that we are -- we are still in discussion to get that into the purchase order. Second, the collection for this should be faster than the original order because first time we kind of deliver the product, tested it, then there is acceptance testing. And then there is kind of rigorous testing against integration with their existing elements and all that. So those things will not be there when we go for this add-on because these add-on POs would be same technology, similar products to be integrated or to be installed. So the delivery time and installation time and acceptance saying would be much faster.

Okay. Got it, sir. And sir, the last question is, can you give me what is the total head count as of March '26 vis-a-vis March '25.

So total head count is roughly about 2,300 employees, and that has broadly remained the same compared to the previous year.

Ladies and gentlemen, with this, I now hand the conference over to the management for closing comments.

So thank you, Mohit. So thanks, everyone, for attending the call and for all your questions. Again -- once again, first of all, as again my apologies for starting this an hour later than the scheduled time. And secondly, as you've seen the results of FY '26, the key takeaway I want to gentlemen to have is that, yes, the results have been quite disappointing, but at the same time, we have to -- we are positive lot of future based on which we have made substantial investments during the year to make sure we are -- our products are ready and technologically ready and capable for the business and the technology transition that we see. So we look forward to a much better future. And with that mindset, the investments have been made and hope to work with you all and connect to you all in future again and deliver a much better FY '27. Thank you.

Thank you. On behalf of ICICI Securities Limited, that concludes this one. Thank you all for joining us, and you may now disconnect your lines.