TEJASNETNSE3 June 2019

Tejas Networks Limited has informed the Exchange regarding Investor Presentation

Tejas Networks Limited

June 03, 2019

The Secretary National Stock Exchange of India Ltd Exchange Plaza, C/1, Block G, Bandra Kurla Complex, Bandra (East) Mumbai – 400 051 NSE Symbol: TEJASNET

Dear Sir/Madam,

Re: Analyst Day Presentation

The Secretary BSE Limited P J Towers, Dalal Street, Fort, Mumbai – 400 001 BSE Scrip Code: 540595

Further to our letter dated May 23, 2019 intimating about organising the Analyst day, please find attached the Analyst Day Presentation made at that event which was held on May 31, 2019.

We request you to please take the same on record.

Thanking you,

Yours sincerely For Tejas Networks Limited

N R Ravikrishnan General Counsel, Chief Compliance Officer & Company Secretary

TEJAS NETWORKS ANALYST DAY- MAY 31, 2019

Corporate Overview

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 uncertainties associated with our expectations with respect to, but not limited to, our ability to successfully implement our strategy and our growth and expansion plans, technological changes, our exposure to market risks, general economic and political conditions in India which have an impact on our business activities or investments, changes in the laws and regulations that apply to the industry in which the Company operates. The Company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the Company.

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 for fiber  Wireless: LTE-based wireless broadband access  Switches: Ethernet switches used for building critical infrastructure

• Technology differentiation: “Software-defined Hardware”

 Innovative use of programmable silicon; time-to-market and cost advantage  Award-winning products- recognition at international forums  World-class talent. More than 50% team in R&D

• Innovative business model- growth + profitability in a tough industry

 Leveraging Indian R&D costs to have 4X R&D efficiency  Debt-free and Profitable; Focus on Innovation + Quality + Cost  FY19 Net Revenues of Rs 878 Cr (+18.5% YoY); 41.5% YoY PBT Growth

• Success in world’s most competitive telecom market leading to global expansion

 #1 in Optical aggregation in India; Top-10 globally (Source: Ovum)  Customers in 75+ countries; Increasing number of wins in Tier-1 operators  Focus on high-growth markets- India, SE Asia, Africa, Americas

1st Deep-technology Indian startup to do IPO

Telecom Industry Eco-system : Where we Fit

s r e m o t s u C r u O

Telecom Service Provider

RJio, Airtel, Voda-Idea

Mobile, Fixed ine, Wholesale

Internet Service Provider

Tata Comm, Hathway, Sify

Fiber(Home/Biz), Cable

Critical Infrastructure

Railtel, Power Grid, Defense

Rail, Power, Oil&Gas, Smart City

Government

BSNL, MTNL, BBNL

PSU Telcos, USOF

t n e m p u q E e v i t c A

Wireless Access

Nokia, Ericsson, Huawei, Tejas

Fixed(4G/LTE)

Mobile

Transmission

Tejas, Ciena, Nokia, Huawei

Optical

Microwave

Switches & Routers

Cisco, Juniper, Arista

Switches

Routers

t n e m y o p e D

*Tejas Addressable

Cell Towers

Exchanges

Businesses

Data Centers

Homes

Utility Sites

We Enable High-capacity Data Networks

Terrestrial Internet Distribution

TJ1400

Captive & Wholesale Networks for Utilities

TJ1600

TJ1400

Nx10G ACCESS/EDGE

TJ1600

Nx100G METRO CORE

TJ1600

Mobile Backhaul

Residential Broadband over Fiber or Fixed Wireless

TJ1400

TJ1600

Bandwidth Services to Business Customers

High-capacity Data Center Interconnections

Backbone Networks for Defence/Government

Macro trends driving Data Growth and our Business

Internet of Things

VPN

VOIP

2022 Total Traffic

4.8 ZB/Yr

Compliance Driven Corporate Back-ups

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

Emerging Technologies to address Data Growth

FIXED BROADBAND

4G, 5G & IOT

CLOUD, DATA CENTER

Multi-gigabit Access on Optical Fiber (FTTX) and Broadband Wireless (WTTX)

Network Densification and Fiberization driving growth in Metro Networks

Demand for Massively Scalable DWDM Networks with Multi-terabit Switching

R&D Investments increasing our Addressable Market

~2X

Switches for Critical Infrastructure

Multi-terabit PTN/OTN

Fiber-to-the-X (GPON)

Optical Aggregation & Metro WDM

FY16

Note: the #s represent Total Addressable Market (TAM) for Tejas products on a global basis. Actual addressable market is lower, since we are not focusing on all geographies

Source: Ovum and Internal Estimates

GPON: Gigabit Passive Optical Network WDM: Wavelength Division Multiplexing OTN: Optical Transport Network PTN: Packet Transport Network

Fixed Wireless Access (4G/5G)

Broadband Access, Optical Aggregation & Metro WDM

FY20

Additional TAM (FY20) ~$9 Bn

TAM (FY16) ~$9 Bn

Investing in Sales to Expand our Global Footprint

Total Addressable Market (TAM) of ~$9 billion

$4.7b TAM

Americas

$1.1b TAM

Africa & Middle East

$1.9b TAM

South East Asia

India

$1.5b TAM

Deployment in 75+ Countries

Large installed base 475,000+ deployed

Focus on fastest-growing regions

25+ Tier-1 Customers

Our Sustainable Competitive Advantage

Software-defined Hardware ™ Programmable silicon eases feature upgrades, quicker incorporation of new standards and protocols

Ultra Converged Broadband Access/Edge Flexibility to offer different services on fiber/copper/wireless using relevant technologies

Future Ready Products Support multiple technology generations from same platform (2G/3G  4G/5G)

Innovative Business Model Cost-efficient India-based R&D and low operating costs and asset-light manufacturing delivers superior financial performance

Reputed Board & Strong Corporate Governance

Balakrishnan V. Non-Executive, Independent Director and Chairman Founder and Chairman of Exfinity Venture Partners Ex-Group CFO and Board member of Infosys

Leela Krishnamurthy Ponappa Non-Executive Director, Independent Director Indian Foreign Service Officer Ex-Ambassador of India to Thailand and Netherlands

C.B. Bhave Non-Executive Director, Independent Director Chairman, SEBI (2008 -2011) Chairman and MD, NSDL (1996- 2008) IAS (1975 Batch)

Sanjay Nayak CEO and Managing Director 30+ years experience in telecom/electronics Ex-Managing Director at Synopsys Fellow INAE, Member-FICCI Startup Council CII National Committee on ICTE; Ex Co- Chairman of Telecom Export Promotion Council. MS, Univ of North Carolina

Dr. Gururaj Deshpande Non-Executive Director President & Chairman of Sparta Group LLC PhD, Queens University, Canada Life-Member of the MIT Corporation Founder of Deshpande Foundation

Arnob Roy COO and Whole-time Director 30+ years experience in telecom/eelctronics Ex-Manager, R&D, Synopsys Master’s Degree, University of Nebraska Bachelor of Technology, IIT, Kharagpur

Senior Management Team: Global Industry Experience

Sanjay Nayak Chief Executive Officer and Managing Director 30+ years experience in telecom/electronics Ex-Managing Director at Synopsys Fellow INAE, Member-FICCI Startup Committee & National Committee on ICTE

Kumar N. Sivarajan Chief Technology Officer Associate Professor, IISc, Bangalore Former Chairperson, Telecom Standards Development Society Ph.D, California Institute of Technology

Shirish Purohit Head-Sales (India and Emerging Markets) 25+ years experience in telecom Ex-CEO and Founder of Midas Communications M.Tech from IIT Madras, B.E from REC, Nagpur

Arnob Roy Chief Operating Officer and Whole-time Director 30+ years experience in telecom/electronics Ex-Manager, R&D, Synopsys Master’s Degree, University of Nebraska Bachelor of Technology, IIT, Kharagpur

Venkatesh Gadiyar Chief Financial Officer Ex-Assistant Financial Controller, Infosys Fellow Member, Institute of Chartered Accountants of India

Ranajit Hajra EVP, Global Services Group Former Regional Director, Global Delivery at Nokia 27 years experience incl. at Nokia, AT&T, Philips and Tata Group

Sukhvinder Kumar President, Global Manufacturing Operations Ex-CEO and Managing Director, Eolane Electronics Advanced Management Program, IIM, Bangalore

N.R. Ravikrishnan General Counsel and Chief Compliance Officer Ex-Company Secy and Head Compliance, Infosys 30+ years of experience in Tata, Infosys and TVS

Abhijat Mitra Chief Human Resources Officer (CHRO) Former HR Head of McKinsey Knowledge Center MBA from IIM Indore

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 Industry Total Experience 800

Tejas Experience

~50% with > 10 yrs industry experience

121

152

465

114

171

174

222

600

400

200

~40% @ Tejas > 5 yrs; 20% > 10 yrs

0 to 5

5 to 10

10 to 15

15 to 20

> 20

0 to 5

5 to 10

10 to 15

15+

World-class R&D Team

38% of R&D team from premier institutes

160

250

156

254

39% of R&D team post graduate/ PhD

Others

Premier institutes

Graduates

Post Grads

400

300

200

100

Widely Recognized for Innovation and R&D

2018-2019

FT1000 high-growth list for Asia-Pacific

Finalist at Broadband World Forum Awards, Germany

Finalist at Leading Lights Award, USA

Best Equipment Supply Partner by GoI

Aegis Graham Bell award in “Digital India Initiative”

“Best Exporter” award in Gold Category by FKCCI

2016-2017 300+ patents filed

President of India award for successful commercialization of indigenous innovation in 2016

2012-2015

200+ patents filed

IESA Most Innovative Product Award in 2016

National Intellectual Property Award by Minister of Commerce and Industry in 2017

CSIR Diamond Jubilee award from PM in 2012

2000-2008

17 patents filed

Global Deloitte Technology Fast-50

CSIR Diamond Jubilee award from PM in 2006

Red Herring Top- 100 Asia

2009-2012

Technology and Innovation awards from • NASSCOM • Economic Times • Aegis Graham Bell • TCOE India

100+ patents filed

Case Study

Medium-term Strategy

Leverage incumbency in India to benefit from pent-up demand 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, to reach 50% of overall revenues

Continue to invest in R&D to maintain our product differentiation & expand our portfolio to increase our addressable market

Continue to deliver strong financial performance- maintain profitable growth and improve working capital efficiency

Financial Model

Unique Business Model- Profitable in a Challenging Global Industry

Strengths of Tejas Business Model

Advantage against Global Peers

Use of mass-market FPGA devices, Ownership of silicon IPR, Outsourced “Asset-light” Manuf. to EMS companies in India

Majority of our costs are on manpower, which are India-based Strong software skills from India

Sales Focus on fewer, but high growth and large potential markets; Effective use of India for back-end support activities

Sustainable financial performance

COGS 58.2%

R&D 13.2% (net 5.8%)

SG & A 13.6%

Depreciation & Amortization 7.5%

OPERATING PROFIT 14.9%

Tejas Gross Margins are close to those of global peers, despite lower economies of scale and large proportion of India revenues

Benefits of India-based R&D; 4-times R&D for same cost as compared to western peers

SG&A costs are half that of global peers, while creating a large growth potential

Growth, with profitability

Financial Trends

` Cr

3 Yr CAGR 12.5%

` Cr

3 Yr CAGR 73.8%

3 Yr CAGR 19.7%

3 Yr CAGR 72.7%

Financial Trends (Cont’d)

` Cr

Operating Expenses (Net)

200

150

100

142

147

20%

119

19%

170

19%

17%

21%

20%

19%

18%

17%

16%

FY 16

FY17

FY18

FY19

Operating expenses

Opex as % of Revenue

` Cr

120

R&D expenses

10%

13%

12%

FY 16

FY17

FY18

FY19

15%

10%

Net expense

Capitalised

R&D as % of Revenue

` Cr

G&A expenses

` Cr

Finance charges

3.9%

3.7%

3.4%

4.0%

3.5%

3.0%

2.5%

2.0%

10%

FY 16

FY17

FY18

FY19

FY 16

FY17

FY18

FY19

G&A expenses

G&A as % of Revenue

Finance cost

as % of Revenue

` Cr

100

S&M expenses

11%

12%

10%

FY 16

FY17

FY18

FY19

S&M expenses

S&M as % of Revenue

` Cr

Additions to Assets (excluding Manpower)

FY 16

FY17

FY18

FY19

Additions to Assets (excluding PD)

as % of Revenue

Financial Trends (Cont’d)

Working capital*

` Cr

Cash and Cash equivalents*

` Cr

600

500

400

300

200

` Cr

800 700 600 500 400 300 200 100 -

233

431

456

581

206

178

323

141

FY 16

FY17

FY18

FY19

Working capital

WC days

Receivables

665

236

203

376

397

156

311

135

245

220

195

170

145

120

260 240 220 200 180 160 140 120 100

600

450

300

150

` Cr

300

250

200

150

100

518

370

170

Networth

1,320

1,152

593

395

` Cr

1,500

1,200

900

600

300

FY 16

FY17

FY18

FY19

FY 16

FY17

FY18

FY19

Cash and cash equivalents

Networth

Payables

156

214

254

132

167

153

180 160 140 120 100 80 60 40 20 -

` Cr

250

200

150

100

Inventory

232

125

182

191

181

150

125

100

FY 16

FY17

FY18

FY19

FY 16

FY17

FY18

FY19

FY 16

FY17

FY18

FY19

Receivables

DSO

Payables Amount

DPO

Inventory

Inv days

* Delays in payment from one large Indian Government customer resulted in reduction of Cash and Cash equivalents and increase in Working capital days for FY 19

Technology Trends and Product Strategy

Long-term Technology Drivers

Leading to an Exponential Increase in Packet Traffic on Telecom Networks

IoT

Cloud and Data Centers

SDN/NFV & 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 NFV: Network Function Virtualization

5G: Will drive a new Network Architecture

Peak Data Rate 20 Gbps

User Data Rate 100 Mbps

Latency 1-10 ms

Tower Density 10x (4G)

User Density 10x (4G)

4G Architecture

Mobile Backhaul

Radio Unit

Baseband Unit

Distributed Radio Access Network (RAN)

Evolved Packet Core (EPC)

5G Architecture

Mobile Fronthaul

Baseband Unit

Centralized Radio Access Network (RAN)

Mobile Backhaul

Virtualized EPC and RAN (vEPC, vRAN)

Radio Unit

Impact of 5G on our Business

Mobile Fronthaul Market (USD $Mn)

Source: Ovum Reports

Mobile Backhaul/Fronthaul • 5G will lead to “densification” of cell sites which will increase backhaul expenditure

• 5G speeds and latencies cannot be

efficiently served by microwave; most towers will be fiberized

• 5G will add $1.5 billion of optical fiber based

“fronthaul” network component by 2023

Fixed Wireless Access (FWA)

• Fixed Wireless Access (FWA) emerging as

a significant use case for 5G

• FWA will be used to deliver broadband

services if fiber laying is difficult

• $1.8 billion market by 2023 spanning both

urban and rural markets

• With 5G, our addressable market for FWA

will go up dramatically

Impact of IoT on our Business

TJ2100N/ONT

FTTH (Home)

FTTP (Pole)

FTTB (Basement)

TJ2100N/ONT

• IoT adoption will cause a massive influx of

data traffic into telco networks; specialized IoT operators for enterprise-wide rollouts

• Copper (DSL) access services being replaced by Gigabit FTTH services for “Smart Homes” • Cable MSOs too adopting fiber-deep architectures preparing for IoT traffic deluge

• IoT will catalyze 5G investments; Asia will account for ~30% IoT revenues by 2025

Source: Ovum Report

Smart Homes, Smart Cities, Smart Utilities will be lead applications

Impact of Cloud and Data Center Interconnect (DCI)

Source: Ovum Reports

• Global market for Data Center Interconnectivity (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-built DCI products

optimized for interface density, size and power

• Market opportunities in both captive (led by web companies) and wholesale (carrier-led) networks

Impact of SDN/NFV/Disaggregation on our Business

• SDN: Programmable telecom networks with an “app-like”

service deployment experience

• NFV: Virtualization of specialized hardware functions in

general purpose servers

• Both at Access (vCPE) and Aggregation (VNF)

• Disaggregation: Hardware-Software decoupled resulting

in better innovation

• Key Benefits

• Greater Service Agility, Lower Network Opex, New Service

Opportunities, Reduce Vendor Lock-in

• Lower Hardware Capex (Standardized) & Software Capex (Open

Source)

• Well positioned to benefit from this trend due to software-

defined hardware™ architecture

• Disaggregation promotes “best-of-breed” procurement

approaches by service providers

• Enables new vendors like Tejas to potentially break into incumbent

Applications

Proprietary NOS

Hardware

Tightly Coupled

App 1

App 2

App N

Standard NOS

Hardware “A”

Hardware “B”

accounts through innovative products

SDN: Software Defined Network NFV: Network Function Virtualization VNF: Virtualized Network Function

Open Hardware

Maintaining Technology Leadership

Active participation in national and international standards bodies

Generating and protecting in-house IPR by filing patent claims worldwide

Close collaboration with customers to understand their network requirements

Establishing thought leadership at international conferences

Aligning Product Roadmap with Evolving Technology and Market Requirements

Products and Applications

Comprehensive Optical Product Portfolio

e r o C o r t e M

n o i t a g e r g g A

s s e c c A

48T

TJ1600S

TJ1600I

TJ1600-11

640G

360/120

320G

240G

60G

16G

80G

60G

20G

10G

OTN

PACKET

TJ1400-3

Packet Optical/OTN

TJ1400-18

TJ1600-6

TJ1400P

TJ1400-7

TJ2100N

PTN

WDM

GPON

Our Product Focus : from Access to Metro Core

Devices Inside Home

Home

End-to-End Management from a single platform (across all products)

Home

Fiber/GPON

Cell Tower (LTE)

Wireless Access

LTE/Fiber

Fiber

Office

Fiber

LAN inside Office

Fiber/GPON

Devices Inside Home

Cell Tower (LTE)

Wireless Access

LTE or Fiber

Fiber

Office

LAN inside Office

Access

Metro

Core

Access

Metro

Core

Speeds

Nx10G => 100G

Tech

PTN, SDH, GPON, LTE

Products

TJ1400, TJ1600-2

Speeds

100G => Nx100G

Tech

DWDM, OTN,PTN

Products

TJ1400-7, TJ1600

Speeds

Nx100G => 400G

Tech

ROADM, OTN, SDN

Products

TJ1600, TJ1400-18

COMMUNICATE RELIABLY at LOWEST COST

Focusing on Growing Technology segments

Optical/Ethernet Aggregation (USD $Billion)

Fixed Wireless Access (USD $Billion)

2023

2019

Fiber-to-the-Home (GPON) (USD $Billion)

4.5%

7.6

1.8

1.3

2019

2023 Access & Metro DWDM (USD $Billion)

7.5%

11.4

2018

6.1

2023

2019

8.5

2023

Flexible Software-defined Hardware™ Architecture

Benefits for Customer

349 Patents

270+ FPGA IPs

MULTI-GENERATION PRODUCTS (2G to 5G)

LOWER TOTAL COST OF OWNERSHIP

PROGRAMMABLE SILCON

3M+ LINES OF SOFTWARE CODE BASE

Benefits for Company

TIME-TO-MARKET ADVANTAGE

DESIGN REUSE LOWERS R&D COST

DELIVER CUSTOM FEATURES

45+ Products

300+ PCBs

FIELD UPGRADES ON INSTALLED BASE

Innovative Ultra-converged Broadband Access/Edge Product

Fiber Broadband Access

TJ1400

Enterprise Data Services

Fixed Wireless Access

Packet Optical Transport

Traditional Service Delivery Architecture

GPON OLT Product

CE2.0 Edge Product

Converged Fiber Platform Broadband

Enterprise Services

Wireless Broadband

4G/LTE Base Station

CONVENTIONAL AGGREGATION PRODUCT

TOWARDS CORE

Unified Service Delivery Architecture

Multiple Products Subsumed as PCBs in an Ultra-converged Platform

Converged Fiber Platform Broadband

Enterprise Services

Wireless Broadband

GPON OLT Card

Packet Fabric Card

TOWARDS CORE

4G/LTE Base Station Card

Network Applications Where We Win

MOBILE BACKHAUL Networks for transport of mobile voice, data and video over optical fiber

WHOLESALE Bandwidth sale to other telcos or web- scale companies

NETWORK MODERNIZATION Phased transition from TDM to Packet networks

UTILITIES Captive or commercial networks for power, rail/metro or oil and gas companies

ENTERPRISE Leased line or VPN connectivity to businesses on TDM, Ethernet or lambdas

BROADBAND ACCESS National rural broadband networks, Smart cities

Why We Win

MOBILE BACKHAUL Converged Infrastructure for 2G/3G -> 4G/5G backhaul

WHOLESALE OTN Cross-connects Alien Wave Solution

UTILITIES Seamless transition to packet; Integrated solution for SCADA, Teleprotection

ENTERPRISE Guaranteed Quality of Service Low Latency Services

NETWORK MODERNIZATION High-capacity Circuit Emulation

BROADBAND ACCESS Utra-converged Access Technology

Optimized Networks for Converged Services

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 software-defined hardware™ architecture gives us a

competitive edge

• Ultra converged access/edge, Multi-Terabit Optical switching, Multi-generation

technology

• Differentiated features for high potential network application wins

• Mobile Backhaul/Fronthaul, Wholesale Bandwidth, Network Modernization, Critical

Infrastructure, Enterprise Services, Broadband Access

• Strong technology team, influencing/tracking new standards, driving

innovation and aligning product roadmap with market needs

Sales Strategy

Our Sales Focus: High-growth geographies

$4.7b TAM

Americas

$1.1b TAM

Africa & Middle East

$1.5b TAM

India

$1.9b TAM

South East Asia

Total Addressable Market (TAM) of ~$9 billion

Revenue By Segments

BSNL/BBNL 36%

Critical Infrastructure 19%

BSNL/BBNL 47%

Critical Infrastructure 14%

Increased International Direct

YoY growth 70%

Continued growth in India Private

YoY growth 28%

Reduced dependency on India Govt.

YoY growth 7%

FY 19 Net Revenue grew by 18.5%

India: Data and Broadband Growth to Continue

20M->100M (fixed broadband users) by 2022

400M->1.2B

(mobile broadband subs) by 2022

20%->60%

(cell towers fiberized) by 2022

1Lac -> 6Lac (broadband in villages) by 2022

100% (YoY data growth) next 5 years

$1B Optical Networking Market (growing to $1.2B by 2022)

India Business- Growth Drivers

Private

Government-Critical Infrastructure

Government- Telco & USO

 Increased fiberization of cell towers is required to cater to growing mobile data demand  Cloud/Datacenter demanding

higher bandwidth due to exploding video traffic, e- commerce and web usage

 Residential Broadband

(FTTX) is an untapped market and will be key growth driver  4G investments will continue for next 2-3 years; Large 5G rollouts will start after 2 years

 Robust, high-capacity telecom

 Multiple USOF opportunities

infrastructure is essential for Utility companies (power, rail, oil & gas, metro), defense, security  Captive Networks are being

upgraded for automatic control systems, video surveillance, high- speed Internet, smart grids etc.  Utility companies are also selling

wholesale bandwidth as Carrier of Carriers– Railtel, PowerTel

 Steady growth in this segment to

continue over medium term

 BharatNet Phase 2 – Central  BharatNet Phase 2 – States  BharatNet – WiFi to Villages  LWE (Left Wing Extremist) & other remote networks

 Augmentation of Intra-district

Capacity in N.E

 BSNL/MTNL need to upgrade

their optical infrastructure- capex plans identified but on hold  Govt’s focus on Design and

Make-in-India to achieve “Net Zero” imports of telecom equipment over next 5 years

Sales Outlook: India

Private

Government- Critical Infra.

Government- Telco & USO

 Our incumbency, pan-India

support, local manufacturing and deep relationships with operators enables us to deliver right-sized products to cater to their needs

 Channel partnerships for

securing enterprise and captive network business.

 We are expanding wallet share through new application wins

 FTTx based on GPON  Metro capacity upgrades: on

OTN/DWDM

 Enterprise data services

 Dominant marketshare in this

sector with a strong track record  Strong product fit- we seamlessly

modernize legacy networks  Strong partnerships with local

System Integrators who execute turnkey projects

 Preference to Make in India (PMI) as well as security-sensitivity, benefits domestic manufacturers

 We see steady run-rate growth

across large number of customers in FY20

 Favorable policies such as Preference to Make in India (PMI)

 Focus to promote domestic design-led manufacturing in NDCP and by TRAI

 We expect to see clarity on

USO funded projects as well as BSNL’s capex plans post Q2

 Revenues from this segment will continue to be lumpy

Sales Outlook: South and South East Asia

Opportunity

 Targeted countries:

 Bangladesh, Sri Lanka, Bhutan, Malaysia, Vietnam,

Cambodia, Indonesia, Philippines, Myanmar, Mongolia

 100+ telecom service providers in this region  Strong demand for optical networking equipment: Total Addressable Market of ~$1.9b in target countries; expected to grow to ~$2.4b by 2023  BIMSTEC/ASEAN is a focus area for Indian-Govt’s

telecom exports; Line-of-credit are available  Mobile internet users in Southeast Asia spend

considerably more time on Internet than global peers

 Over 300 million super-broadband subscribers (>

100 million) by 2023

Outlook

 We have established strong customer references in the region. Customer Profile (by FY19 revenues):

 Up to 1 Cr : 24  1-15 Cr : 4  Above 15 Cr : 1

 Credible alternative for customers looking to diversify their vendor base, beyond Chinese  We have very good product-fit for market needs:  Ultra-converged platform integrating FTTx, WTTx,

PTN and OTN in one shelf

 Universal backhaul from 2G/3G to 4G/5G

 Continuing to Increase regional sales investment  Strong local presence in Malaysia, Bangladesh, Sri

Lanka, Singapore, Vietnam

 Expect first success in FY20 for G-to-G project  Good customer traction and active engagement should result in a strong YoY growth in FY20

Sales Outlook: Africa and Middle East

Opportunity

Outlook

 Focus for Africa- all regions

 South Africa, Nigeria, Ghana, Kenya, Burundi, Uganda, Rwanda, Algeria, Ghana, Morocco

 Focus countries in Mid-east

 Oman, Egypt, Saudi, Afghanistan, Qatar  Total Addressable Market of ~$1.1b in target countries expected to grow to ~$1.3b by 2023

 Strong customer references: FY19 Customer Profile

 Up to 1 Cr : 32  1-15 Cr : 8  Above 15 Cr : 1

 We Increased sales investment in the region by 23% YoY in FY19. Continuing to add resources  Local presence in South Africa, Kenya, Nigeria,

 200+ telecom service providers in the region; over 1

Dubai, Algeria, Oman

billion telecom subscriptions

 Got selected by 4 new Tier-1 operators (some are

 Providing high-speed broadband is a top priority for

all governments in developing countries

pan-African) and 15 new customers

 Application where we are winning:

 Private telcos are expanding from mobile networks to data networks. Also inducting new vendors to reduce their supplier concentration risk

 Significant pent-up demand for fixed broadband which is currently low at 2.6 million; fixed LTE accounts for 21% of these subscriptions and 50% of data usage  Super-broadband subscriptions to grow at 38% CAGR 47

 Alien wavelength: 100G/200G interoperable with

multiple, existing DWDM vendors

 Ultra-converged broadband access/edge  Good customer funnel and engagements with

multiple pan-African, Tier-1 operators should result in a strong YoY growth in FY20

Sales Outlook: North America

Opportunity

Outlook

 Targeting customers

 USA- Tier 2 and Tier-3 operators and cable companies  Mexico- all operators

 Total Addressable Market of ~$4.7b in target countries expected to reach ~$5.7b by 2023

 450+ telecom service providers distributed across  Strong demand for superfast broadband (>100 Mbps) with ~10% of subscribers to have Gigabit access over fiber by 2022

 New buildout cycle with 5G has started; more

fiberization

 In USA- there are trade barriers for Chinese vendors.

We have product cost advantage as well

 Product Fit:

 High-capacity circuit emulation for Network

Modernization

 Ultra-converged broadband access/edge  Feature-rich Metro WDM/OTN products

 America-direct business grew well, driven

primarily by success in Mexico. OEM business has shrunk and is unlikely to grow in future  Added 11 new customers including one Tier-1.

Customer Profile (by revenues)

 Up to 1 Cr : 15  1-15 Cr : 5  Above 15 Cr : 1

 Increased sales investment by 21% YoY in

FY19. Will continue to add resources in FY20  Local office in Mexico where we have strong

customer reference and successes Increasing sales teams in USA



 In FY20, Mexico is expected to show strong

growth with business from existing customers. In USA, we expect new customer wins and strong revenue growth, based on several active customer engagements

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 Tier-1 customer wins in FY19 provides us a strong

foundation for growth

• Each of the 3 regions: South/SE Asia, Africa/Mid-east and America expected to deliver robust

growth in FY20, based on existing wins and strong new customer engagements

• International revenues expected to reach nearly 50% of total in 3 years

• India business will continue to see solid growth • Winning new applications in India-Private accounts • Critical Infrastructure business (Power, Rail, Oil & Gas, defense) has strong run-rate trend • India-Government (BSNL/USO) business is lumpy, but has large potential, with specific

broadband projects lined up for execution

Supply Chain Management

Asset-Light Mfg. with Focus on High Value Addition

TEJAS

TEJAS + EMS

EMS

Product Idea & Innovation

• •

Betting on the right technology and standards features Innovative product design and architecture

R&D, Product Design (System + HW + SW) • Creation of IPR (Product IPR; Patents) • •

System design; Hardware, SW, FPGA/Silicon, Mechanics Product design, development, testing/verification

Components • • •

Silicon components , Discrete Bare PCBs, Mechanicals, Cable Assemblies Passive components, Electro-mechanicals

Manufacturing (SMT), Assembly & Testing • • •

Board Stuffing, SMT : done by EMS Testing, Final Assembly and Quality Assurance Logistics, Packing and Shipping out of Tejas Factory

30~65 %

30~50%

5~20%

Tejas Supply Chain Model

TEJAS NETWORKS LIMITED - SUPPLY CHAIN MODEL

Strategic Supplier Partnership

Asset light model Tie-up with global EMS

Lead Time & Cost Innovation

Factory Capacity & CAPEX Planning

Customer PO or Forecast

Order Fulfilment Planning

Asset Light Manufacturing (Turn Key biz with EMS partners) PCB A Test

Parts Ordering

PCB Assy

Integration & Testing

Quality

Customer Shipment Delivery

Order Booking, Sales Order Creation in SAP

MRP Run, Forecast and Ordering on suppliers

Review & Alignment of material schedule

Monthly & Weekly Production Plan

Review & Tracking of Customer OTD

Step towards Operational Excellence by implementing 5S, Kaizen, Poke Yoke, Basic Lean & 6 Sigma Tools

Tejas Supply Chain model integrates all it’s stake holders such as Customers, Suppliers & Business Partners with internal elements like Strategic Planning, Procurement, EMS Management, Manufacturing, Quality and Logistics. The objective is to create a sustainable Best-in-Class Global supply chain meeting and exceeding customer expectations.

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.

 70+ Highly skilled and motivated employees augmented by flexible resources support to manage peaks.

 ESD compliance, including elevated Temperature testing chambers to ensure high Quality of our products.

 18000 Sq. Ft of warehouse space for Components, Assemblies & FG

Factory Premises

System Integration

Testing, Qualification

Warehouse

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 o RITS (Return in time of Service) o FQA (Final QA) Yield

99.999% 0.29% 99.5%

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 investments expanding our addressable market and competitiveness

• We continue to invest aggressively in R&D and IPR creation • We have a very competitive product portfolio from Access to Metro core • We are getting global recognition and international customer success with our products

• Sales focus is to increase run-rate business and international

• Drive growth in International-direct, India-private

• Sales Investments in International-Direct starting to show results

• Many new customer wins including several Tier-1 customers in our target countries • We will continue to increase our international sales and marketing investments

• India business continues to see steady growth • Winning new applications in India-Private • Critical Infrastructure business (Power, Rail, Oil & Gas, defense) in India showing strong run-rate trend • India-Government (BSNL/Bharatnet) business is lumpy, but has good funnel, based on projects that are lined up

• We have a proven financial model of delivering growth, while maintaining profitability

Thank you!

ir@tejasnetworks.com

Contact - +91(80)41794600

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