Tejas Networks posts Rs 202 crore Q1 loss despite revenue surge

Bengaluru: Tejas Networks is finding a stronger signal on revenue, but profitability remains out of range. The Tata Group-backed telecom equipment maker reported a sharp jump in sales during the June quarter, even as continued losses and rising debt underscored the challenges of scaling its business.

Tejas Networks reported net revenue from operations of Rs 402 crore for the quarter ended June 30, 2026, marking a 21 per cent sequential increase from Rs 333 crore in the March quarter and almost double the Rs 202 crore reported in the corresponding quarter last year. For the full financial year 2025-26, the company recorded revenue of Rs 1,103 crore, reflecting steady business momentum despite a difficult operating environment.

The improved top line, however, did not translate into profitability. Profit before tax stood at a loss of Rs 271 crore, narrowing slightly from a loss of Rs 281 crore in the previous quarter and Rs 297 crore a year earlier. For FY26, the company reported a cumulative pre-tax loss of Rs 1,354 crore.

Net loss for the June quarter came in at Rs 202 crore, compared with Rs 211 crore in the preceding quarter and Rs 194 crore in the year-ago period. The company had posted a full-year net loss of Rs 909 crore in FY26. Meanwhile, earnings before interest and tax (EBIT) improved to a negative Rs 194 crore, compared with negative Rs 219 crore in Q4 FY26 and negative Rs 232 crore in Q1 FY26.

The balance sheet reflected continued investment in expansion. Gross debt increased to Rs 4,866 crore, pushing net debt to Rs 4,277 crore, up from Rs 3,531 crore in the previous quarter and Rs 3,445 crore a year earlier. The company attributed the increase to capital expenditure and operational requirements. Cash and cash equivalents, however, improved to Rs 589 crore, up from Rs 505 crore in the March quarter.

Working capital requirements also expanded during the quarter. Net working capital rose to Rs 4,478 crore, while net trade receivables increased to Rs 2,232 crore from Rs 1,905 crore in the previous quarter. Inventory declined slightly to Rs 2,358 crore from Rs 2,438 crore, with the company stating that a significant portion of inventory has been earmarked for executing Bharat Sanchar Nigam Limited’s nationwide 4G expansion programme.

The company also reported a more balanced revenue mix between domestic and overseas markets. India contributed 50 per cent of quarterly revenue, while international markets accounted for the remaining 50 per cent. However, its closing order book increased marginally to Rs 1,529 crore from Rs 1,514 crore in the previous quarter, with 93 per cent, or Rs 1,422 crore, coming from domestic orders. International contracts accounted for 7 per cent, or Rs 107 crore, of the order pipeline.

Operationally, Tejas Networks secured several notable contracts across wireless and wireline businesses. The company won its first commercial contract to deploy an end-to-end 5G network for a telecom operator in South America. It also completed the manufacturing and delivery of 5G Massive MIMO radios to a global customer in partnership with NEC Corporation and was selected by a global Tier-1 telecom operator for a joint research and development programme focused on advanced 5G technologies.

On the domestic front, the company is awaiting formal purchase orders for an additional 26,000 4G sites under Bharat Sanchar Nigam Limited’s nationwide network expansion after receiving a letter of intent.

In its wireline business, Tejas expanded its fibre broadband footprint by supplying GPON optical line terminals to leading Indian telecom operators. It also delivered 100G and 400G dense wavelength division multiplexing (DWDM) equipment to two major telecom companies for network backhaul and enterprise connectivity upgrades. Overseas, the company secured a network modernisation project for a major power utility and a separate 100G and 400G coherent DWDM expansion contract with an African bandwidth wholesaler.

Innovation continued to remain a key focus. Tejas filed 46 new patents during the quarter, taking its cumulative global filings to 722, of which 380 patents have been granted. The company also completed laboratory and field trials for Direct-to-Mobile (D2M) technology, validating coexistence with conventional LTE and 5G networks.

The company also received industry recognition during the quarter, becoming a top three global finalist at the 2026 Leading Lights Awards for its TJ1600-D3 Data Center Interconnect platform. It won the BCIC Award for Manufacturing Excellence and signed innovation memorandums of understanding with Indian Institute of Technology Gandhinagar and MahaIT to strengthen research and technology development.

Looking ahead, Tejas Networks is positioning itself to capitalise on the rapid expansion of artificial intelligence infrastructure. The company is investing in next-generation 800G and 1.6T coherent optical networking, 50G-PON broadband technology and AI-ready 6G solutions, betting that growing demand for high-capacity data networks will create fresh opportunities.

While the company’s expanding global presence and improving revenue trajectory point to growing demand for its telecom products, investors will be watching closely to see whether stronger order execution and AI-led infrastructure spending can finally help Tejas Networks turn rising sales into sustainable profits.