Tejas Networks Ltd. · NSE:TEJASNET

Tejas Networks — Investor Day (May 2019)

56 slides from Tejas Networks's investor day presentation, May 31, 2019

Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements in this release concerning our future growth prospects are forward-looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward-looking statements due to risks or uncert
Slide 3: Tejas Networks: A Snapshot
Tejas Networks: A Snapshot • Founded in year 2000 in Bangalore; Offices in 10+ countries; 750+ employees • Design and Manufacturer of optical & data networking equipment that is used by telecom service providers and utility companies  Optical: High-capacity Optical transmission and Broadband Access
Slide 4: Telecom Industry Eco-system: Where we Fit
Telecom Industry Eco-system : Where we Fit Telecom Service Provider Wireless Access Cell Towers RJio, Airtel, Voda-Idea Nokia, Ericsson, Huawei, Tejas Active Equipment Mobile, Fixed ine, Wholesale Fixed(4G/LTE) Mobile Our Customers Exchanges Deployment Internet Service Provider Businesses Tata Comm,
Slide 5: We Enable High-capacity Data Networks
We Enable High-capacity Data Networks Terrestrial Internet Distribution TJ1400 TJ1600 Captive & Wholesale Networks for Utilities Mobile Backhaul Nx10G TJ1600 Nx100G TJ1600 TJ1400 ACCESS/EDGE METRO CORE Residential Broadband over Fiber or Fixed Wireless TJ1600 TJ1400 Bandwidth Services to Backbone Ne
Slide 6: Macro trends driving Data Growth and our Business
Macro trends driving Data Growth and our Business 2022 Total Traffic Internet of Things VPN VOIP 4.8 Compliance Driven Corporate Back-ups ZB/Yr Cloud Services On-Demand HD Video Social Networking Video and Mobile Web 1.5 ZB/yr 2017 Total Traffic Source: Cisco VNI Forecast, 2017-2022 © Tejas Networks
Slide 7: Emerging Technologies to address Data Growth
Emerging Technologies to address Data Growth FIXED BROADBAND 4G, 5G & IOT CLOUD, DATA CENTER Multi-gigabit Access on Network Densification and Demand for Massively Optical Fiber (FTTX) and Fiberization driving growth Scalable DWDM Networks Broadband Wireless in Metro Networks with Multi-terabit Swit
Slide 8: R&D Investments increasing our Addressable Market
R&D Investments increasing our Addressable Market Fixed Wireless Access ~2X (4G/5G) Additional Multi-terabit PTN/OTN TAM Switches for Critical (FY20) Infrastructure ~$9 Bn Fiber-to-the-X (GPON) Broadband Access, Optical Aggregation Optical & Aggregation Note: the #s represent Total Addressable Marke
Slide 9: Investing in Sales to Expand our Global Footprint
Investing in Sales to Expand our Global Footprint Total Addressable Market (TAM) of ~$9 billion $4.7b TAM $1.1b TAM Americas $1.9b India Africa & Middle East TAM South East Asia $1.5b TAM Deployment Large installed Focus on in 75+ 25+ Tier-1 base 475,000+ fastest-growing Countries Customers deployed
Slide 10: Our Sustainable Competitive Advantage
Our Sustainable Competitive Advantage Software-defined Future Ready Hardware ™ Products Programmable silicon eases Support multiple technology feature upgrades, quicker generations from same incorporation of new platform (2G/3G  4G/5G) standards and protocols Ultra Converged Innovative Broadband Bu
Slide 11: Reputed Board & Strong Corporate Governance
Reputed Board & Strong Corporate Governance Sanjay Nayak Balakrishnan V. CEO and Managing Director Non-Executive, Independent 30+ years experience in telecom/electronics Director and Chairman Ex-Managing Director at Synopsys Founder and Chairman of Exfinity Fellow INAE, Member-FICCI Startup Council
Slide 12: Senior Management Team: Global Industry Experience
Senior Management Team: Global Industry Experience Sanjay Nayak Kumar N. Sivarajan Shirish Purohit Chief Executive Officer and Managing Director Chief Technology Officer Head-Sales (India and Emerging Markets) 30+ years experience in telecom/electronics Associate Professor, IISc, Bangalore 25+ years
Slide 13: Retaining Top Talent in a Competitive Industry
World-class Team  Highly experienced Senior Sales Team  Average industry experience: 22.5 years  Average experience at Tejas: 8.7 years  Highly experienced Senior R&D Team  Average industry experience: 24 years  Average experience at Tejas: 11.7 years Retaining Top Talent in a Competitive Indu
Slide 14: Widely Recognized for Innovation and R&D
Widely Recognized for Innovation and R&D 2018-2019 5 Finalist at Broadband FT1000 high-growth list for Asia-Pacific Finalist at Leading World Forum Awards, Lights Award, USA Germany 4 2016-2017 President of India award for successful Best Equipment Supply Aegis Graham Bell award in “Best Exporter” a
Slide 15: Medium-term Strategy
Medium-term Strategy Leverage incumbency in India to benefit from pent-up demand 1 for broadband and data; increase depth in India-private accounts so as to reduce dependence on lumpy, India-Govt business Increase international sales in Africa, S. East Asia and America, 2 to reach 50% of overall rev
Slide 17: Unique Business Model- Profitable in a Challenging Global Industry
Unique Business Model- Profitable in a Challenging Global Industry Strengths of Tejas Business Model Advantage against Global Peers Use of mass-market FPGA devices, Tejas Gross Margins are close to those of Ownership of silicon IPR, global peers, despite lower economies of Outsourced “Asset-light” M
Slide 19: Financial Trends (Cont'd)
Financial Trends (Cont’d) ` Cr S&M expenses ` Cr Operating Expenses (Net) R&D expenses ` Cr 200 21% 120 15% 100 90 12% 170 13% 11% 84 11% 12% 10% 10% 142 147 20% 90 10% 9% 51 73 150 20% 10% 75 66 9% 119 19% 19% 60 38 8% 37 19% 30 5% 50 6% 100 30 65 35 40 49 18% - 0% 4% 50 17% 25 17% FY 16 FY17 FY18
Slide 20: Financial Trends (Cont'd)
Financial Trends (Cont’d) ` Cr Working capital* ` Cr Cash and Cash equivalents* ` Cr Networth 600 581 245 600 518 1,500 1,320 233 1,152 220 1,200 500 456 450 206 370 431 195 900 400 300 593 178 323 170 170 600 395 300 150 95 145 300 141 200 120 - - FY 16 FY17 FY18 FY19 FY 16 FY17 FY18 FY19 FY 16 FY1
Slide 22: Long-term Technology Drivers
Long-term Technology Drivers IoT 5G Leading to an Exponential Increase in Packet Traffic on Telecom Networks Cloud and Data SDN/NFV & Centers Disaggregation 4.8ZB/yr by 2022 1.5ZB/yr In 2017 Source: Cisco VNI Forecast, 2017-2022 IoT: Internet of Things SDN: Software Defined Networks © Tejas Networks
Slide 23: 5G: Will drive a new Network Architecture
5G: Will drive a new Network Architecture Peak Data Rate 4G Architecture 20 Gbps Radio Unit User Data Rate Baseband Unit Mobile Backhaul Distributed 100 Mbps Radio Access Network (RAN) Evolved Packet Core (EPC) Latency 1-10 ms Radio Unit 5G Architecture Tower Density Mobile Fronthaul 10x (4G) Virtua
Slide 24: Impact of 5G on our Business
Impact of 5G on our Business Mobile Fronthaul Market (USD $Mn) Source: Ovum Reports Mobile Backhaul/Fronthaul Fixed Wireless Access (FWA) • 5G will lead to “densification” of cell sites • Fixed Wireless Access (FWA) emerging as which will increase backhaul expenditure a significant use case for 5G •
Slide 25: Impact of IoT on our Business
Impact of IoT on our Business TJ2100N/ONT FTTH (Home) FTTP (Pole) FTTB (Basement) TJ2100N/ONT TJ2100N/ONT • IoT adoption will cause a massive influx of Source: Ovum Report data traffic into telco networks; specialized IoT operators for enterprise-wide rollouts • Copper (DSL) access services being re
Slide 26: Impact of Cloud and Data Center Interconnect (DCI)
Impact of Cloud and Data Center Interconnect (DCI) • Global market for Data Center Interconnectivity Source: Ovum Reports (DCI) projected to be $7bn by 2021; 50% in emerging markets • Exponential increase in demand for DWDM and 100G+ (200G/400G/600G) wavelengths for DCI • $1bn market for purpose-bui
Slide 27: Impact of SDN/NFV/Disaggregation on our Business
Impact of SDN/NFV/Disaggregation on our Business • SDN: Programmable telecom networks with an “app-like” service deployment experience Applications • NFV: Virtualization of specialized hardware functions in general purpose servers Proprietary NOS • Both at Access (vCPE) and Aggregation (VNF) • Disag
Slide 28: Maintaining Technology Leadership
Maintaining Technology Leadership Active participation in national and international standards bodies Aligning Product Generating and protecting Roadmap in-house IPR by filing patent claims worldwide with Evolving Close collaboration with Technology customers to understand and their network requirem
Slide 30: Comprehensive Optical Product Portfolio
Comprehensive Optical Product Portfolio TJ1600S 48T 48T Metro Core TJ1400-18 TJ1400-18 9T 9T TJ1600I Aggregation 1T 1T TJ1600-11 640G 360/120 TJ1600-6 320G 240G TJ1400-7 80G TJ1400P 60G 60G 20G TJ2100N Access 10G 16G 5G TJ1400-3 1G OTN PACKET Packet PTN WDM GPON Optical/OTN © Tejas Networks Limited
Slide 31: Our Product Focus: from Access to Metro Core
Our Product Focus : from Access to Metro Core Devices Inside Home End-to-End Management from a single platform (across all products) Home Home Devices Inside Home Fiber/GPON Fiber/GPON Cell Tower Cell Tower Wireless (LTE) (LTE) Wireless Access Access LTE/Fiber Fiber Fiber Fiber LTE or Fiber Office O
Slide 32: Focusing on Growing Technology segments
Focusing on Growing Technology segments Optical/Ethernet Aggregation Fixed Wireless Access (USD $Billion) (USD $Billion) 6% 9% 5 1.8 4 1.3 2019 2023 2019 2023 Fiber-to-the-Home (GPON) Access & Metro DWDM (USD $Billion) (USD $Billion) 4.5% 7.5% 7.6 11.4 2018 6.1 2023 2019 8.5 2023 © Tejas Networks Li
Slide 33: Flexible Software-defined Hardware Architecture
Flexible Software-defined Hardware™ Architecture Benefits for Customer 349 270+ Patents Benefits for Company FPGA IPs MULTI-GENERATION TIME-TO-MARKET PRODUCTS (2G to 5G) ADVANTAGE PROGRAMMABLE SILCON LOWER TOTAL COST 3M+ LINES OF DESIGN REUSE OF OWNERSHIP SOFTWARE CODE LOWERS R&D COST BASE DELIVER C
Slide 34: Innovative Ultra-converged Broadband Access/Edge Product
Innovative Ultra-converged Broadband Access/Edge Product TJ1400 Fiber Fixed Broadband Wireless Access Access Enterprise Packet Data Services Optical Transport © Tejas Networks Limited 2019. All rights reserved. 34
Slide 35: Traditional Service Delivery Architecture
Traditional Service Delivery Architecture GPON OLT Converged Product Fiber Platform Broadband CE2.0 Edge CONVENTIONAL Product AGGREGATION TOWARDS CORE Enterprise PRODUCT Services Wireless Broadband 4G/LTE Base Station © Tejas Networks Limited 2019. All rights reserved. 35
Slide 36: Unified Service Delivery Architecture
Unified Service Delivery Architecture Multiple Products Subsumed as PCBs in an Ultra-converged Platform Converged Fiber Platform Broadband GPON OLT Card Enterprise TOWARDS CORE Services Packet Fabric Card Wireless Broadband 4G/LTE Base Station Card © Tejas Networks Limited 2019. All rights reserved.
Slide 37: Network Applications Where We Win
Network Applications Where We Win MOBILE BACKHAUL UTILITIES Networks for transport Captive or commercial of mobile voice, data networks for power, and video over optical rail/metro or oil and fiber gas companies ENTERPRISE WHOLESALE Leased line or VPN Bandwidth sale to connectivity to other telcos o
Slide 38: Why We Win
Why We Win MOBILE BACKHAUL UTILITIES Converged Seamless transition to Infrastructure for packet; Integrated 2G/3G -> 4G/5G solution for SCADA, backhaul Teleprotection ENTERPRISE WHOLESALE Guaranteed Quality of OTN Cross-connects Service Alien Wave Solution Low Latency Services NETWORK BROADBAND MODE
Slide 39: Technology & Products: Key Takeaways
Technology & Products: Key Takeaways • Strong consumer/enterprise demand for high-bandwidth content driving unprecedented growth in global data traffic • Key technology trends that have a favorable impact on our business • 5G, IoT, Cloud and Data Center, SDN/NFV and Disaggregation • Programmable sof
Slide 41: Our Sales Focus: High-growth geographies
Our Sales Focus: High-growth geographies $4.7b TAM $1.1b TAM $1.9b Americas TAM Africa & $1.5b TAM Middle East South East Asia India Total Addressable Market (TAM) of ~$9 billion © Tejas Networks Limited 2019. All rights reserved. 41
Slide 42: Revenue By Segments
Revenue By Segments Critical Critical BSNL/BBNL BSNL/BBNL Infrastructure Infrastructure 36% 47% 19% 14% Increased International Direct YoY growth 70% FY 19 Continued growth in India Private YoY growth 28% Net Revenue grew by 18.5% Reduced dependency on India Govt. YoY growth 7% © Tejas Networks Limi
Slide 43: India: Data and Broadband Growth to Continue
India: Data and Broadband Growth to Continue 20M->100M (fixed broadband users) by 2022 400M->1.2B $1B (mobile broadband subs) Optical by 2022 100% Networking (YoY data Market growth) (growing to $1.2B by 20%->60% next 5 years 2022) (cell towers fiberized) by 2022 1Lac -> 6Lac (broadband in villages)
Slide 44: India Business- Growth Drivers
India Business- Growth Drivers Government-Critical Government- Private Infrastructure Telco & USO  Increased fiberization of cell  Robust, high-capacity telecom  Multiple USOF opportunities towers is required to cater to infrastructure is essential for Utility  BharatNet Phase 2 – Central growin
Slide 45: Sales Outlook: India
Sales Outlook: India Government- Government- Private Critical Infra. Telco & USO  Our incumbency, pan-India  Dominant marketshare in this  Favorable policies such as support, local manufacturing and sector with a strong track record Preference to Make in India deep relationships with  Strong pro
Slide 46: Sales Outlook: South and South East Asia
Sales Outlook: South and South East Asia Opportunity Outlook  Targeted countries:  We have established strong customer references in  Bangladesh, Sri Lanka, Bhutan, Malaysia, Vietnam, the region. Customer Profile (by FY19 revenues): Cambodia, Indonesia, Philippines, Myanmar, Mongolia  Up to 1 Cr
Slide 47: Sales Outlook: Africa and Middle East
Sales Outlook: Africa and Middle East Opportunity Outlook  Focus for Africa- all regions  Strong customer references: FY19 Customer Profile  South Africa, Nigeria, Ghana, Kenya, Burundi,  Up to 1 Cr : 32 Uganda, Rwanda, Algeria, Ghana, Morocco  1-15 Cr :8  Focus countries in Mid-east  Above 1
Slide 48: Sales Outlook: North America
Sales Outlook: North America Opportunity Outlook  Targeting customers  America-direct business grew well, driven  USA- Tier 2 and Tier-3 operators and cable companies primarily by success in Mexico. OEM business  Mexico- all operators has shrunk and is unlikely to grow in future  Total Addressa
Slide 49: Sales Outlook: Key Takeaways
Sales Outlook: Key Takeaways • Our focus us to increase our run-rate customer business as well as international • Drive growth in International-direct, India-private business • Sales Investments in International-Direct expected to deliver strong growth • Many new customer wins, including several Tie
Slide 51: Asset-Light Mfg. with Focus on High Value Addition
Asset-Light Mfg. with Focus on High Value Addition Product Idea & Innovation • Betting on the right technology and standards features • Innovative product design and architecture 30~65 TEJAS R&D, Product Design (System + HW + SW) % • Creation of IPR (Product IPR; Patents) • System design; Hardware,
Slide 52: Tejas Supply Chain Model
Tejas Supply Chain Model TEJAS NETWORKS LIMITED - SUPPLY CHAIN MODEL Strategic Supplier Asset light model Lead Time & Factory Capacity & Partnership Tie-up with global EMS Cost Innovation CAPEX Planning Customer Order Asset Light Manufacturing Customer (Turn Key biz with EMS partners) Integration PO
Slide 53: Tejas Manufacturing Facility in Bangalore
Tejas Manufacturing Facility in Bangalore  State of the art Integration & Testing facility with 72000 sq. ft. built up area at electronics City phase II , Bangalore  Dedicated shop floors for Export (EHTP) and Domestic (DTA) sales. Factory Premises System Integration  70+ Highly skilled and motiv
Slide 54: Quality Excellence @ Tejas
Quality Excellence @ Tejas ISO 9001 & TL9000 certified company with prime focus on Product Quality and achieving Customer Satisfaction. ~ 140 Kaizens Implemented ISO9001 , TL 9000 Certifications Quality Highlights: o Customer network uptime 99.999% o RITS (Return in time of Service) 0.29% o FQA (Fin
Slide 55: Key Takeaways
Key Takeaways • Data growth trend continues to be a favorable driver for our business in India and International • Strong growth in data usage, broadband, cloud, data center and fiberization are driving optical investments • Fixed wireless applications will increase with 5G • Sustained R&D investmen

Tejas Networks — Investor Day (May 2019) on 6ix

Tejas Networks — Investor Day (May 2019)

Slide 1: Tejas Networks Analyst Day - Corporate Overview

Slide 2: Safe Harbor Statement

Slide 3: Tejas Networks: A Snapshot

Slide 4: Telecom Industry Eco-system: Where we Fit

Slide 5: We Enable High-capacity Data Networks

Slide 6: Macro trends driving Data Growth and our Business

Slide 7: Emerging Technologies to address Data Growth

Slide 8: R&D Investments increasing our Addressable Market

Slide 9: Investing in Sales to Expand our Global Footprint

Slide 10: Our Sustainable Competitive Advantage

Slide 11: Reputed Board & Strong Corporate Governance

Slide 12: Senior Management Team: Global Industry Experience

Slide 13: Retaining Top Talent in a Competitive Industry

Slide 14: Widely Recognized for Innovation and R&D

Slide 15: Medium-term Strategy

Slide 16: Financial Model

Slide 17: Unique Business Model- Profitable in a Challenging Global Industry

Slide 18: Financial Trends

Slide 19: Financial Trends (Cont'd)

Slide 20: Financial Trends (Cont'd)

Slide 21: Technology Trends and Product Strategy

Slide 22: Long-term Technology Drivers

Slide 23: 5G: Will drive a new Network Architecture

Slide 24: Impact of 5G on our Business

Slide 25: Impact of IoT on our Business

Slide 26: Impact of Cloud and Data Center Interconnect (DCI)

Slide 27: Impact of SDN/NFV/Disaggregation on our Business

Slide 28: Maintaining Technology Leadership

Slide 29: Products and Applications

Slide 30: Comprehensive Optical Product Portfolio

Slide 31: Our Product Focus: from Access to Metro Core

Slide 32: Focusing on Growing Technology segments

Slide 33: Flexible Software-defined Hardware Architecture

Slide 34: Innovative Ultra-converged Broadband Access/Edge Product

Slide 35: Traditional Service Delivery Architecture

Slide 36: Unified Service Delivery Architecture

Slide 37: Network Applications Where We Win

Slide 38: Why We Win

Slide 39: Technology & Products: Key Takeaways

Slide 40: Sales Strategy

Slide 41: Our Sales Focus: High-growth geographies

Slide 42: Revenue By Segments

Slide 43: India: Data and Broadband Growth to Continue

Slide 44: India Business- Growth Drivers

Slide 45: Sales Outlook: India

Slide 46: Sales Outlook: South and South East Asia

Slide 47: Sales Outlook: Africa and Middle East

Slide 48: Sales Outlook: North America

Slide 49: Sales Outlook: Key Takeaways

Slide 50: Supply Chain Management

Slide 51: Asset-Light Mfg. with Focus on High Value Addition

Slide 52: Tejas Supply Chain Model

Slide 53: Tejas Manufacturing Facility in Bangalore

Slide 54: Quality Excellence @ Tejas

Slide 55: Key Takeaways

Slide 56: Thank you!