Reliance Communications reports Rs 663 crore comprehensive loss in Q1 FY27

NEW DELHI: Talk about a bad connection. Reliance Communications (RCom) has reported another difficult quarter, with large provisions, unrecorded finance costs and continuing legal disputes keeping the debt-laden telecom company firmly in the red.

For the quarter ended June 30, 2026, RCom’s standalone revenue from operations remained at Rs 56 crore, unchanged from the previous quarter and down from Rs 61 crore in the year-ago period. Standalone total income stood at Rs 59 crore, compared with Rs 58 crore in Q4 FY26 and Rs 63 crore in Q1 FY26.

Standalone expenses, however, fell sharply to Rs 75 crore from Rs 200 crore in the preceding quarter.

At the consolidated level, revenue from operations declined to Rs 74 crore from Rs 81 crore in Q4 FY26 and Rs 83 crore a year earlier. Consolidated total income stood at Rs 82 crore, against total expenses of Rs 91 crore.

The bigger drag came from discontinued operations and exceptional items.

RCom reported a standalone total comprehensive loss of Rs 663 crore for Q1 FY27, although this was substantially lower than the Rs 2,724 crore loss recorded in Q4 FY26 and Rs 2,217 crore in Q1 FY26. Consolidated total comprehensive loss stood at Rs 825 crore.

Standalone discontinued operations reported a net loss of Rs 937 crore during the quarter.

The figure included an exceptional charge of Rs 2,316 crore towards estimated licence fee and spectrum usage obligations. This was partly offset by an exceptional gain of Rs 1,566 crore arising from the settlement of liabilities.

On a consolidated basis, discontinued operations posted a loss of Rs 1,266 crore, including a Rs 2,588 crore provision for spectrum and licence fee obligations and an exceptional gain of Rs 1,630 crore from liability settlements.

The figures underline the extent to which RCom’s legacy obligations continue to overshadow its underlying operations.

The company’s financial position also remains under pressure from finance costs that have not been recognised in the accounts.

Statutory auditor Pathak H.D. & Associates LLP issued a qualified review, flagging several accounting exceptions.

At the standalone level, RCom has not provided for interest expenses of Rs 1,134 crore for the quarter. Cumulatively, unprovided interest had reached Rs 39,078 crore up to FY26.

The company also did not provide for foreign exchange variations of Rs 35 crore. Had these items been recognised, the standalone quarterly loss would have been Rs 1,099 crore higher, while net worth would have fallen to negative Rs 80,952 crore.

At the consolidated level, unprovided interest stood at Rs 1,186 crore for the quarter and Rs 41,153 crore cumulatively. Unrecorded foreign exchange variations stood at Rs 39 crore.

The auditors also flagged the valuation of assets held for sale, including wireless spectrum, towers, fibre and Media Convergence Nodes. These assets continue to be carried at March 2018 valuations, rather than valuations based on the requirements of Ind AS 105, according to the review.

RCom’s financial difficulties are playing out alongside a web of insolvency proceedings, regulatory action and investigations.

The company has been under the Corporate Insolvency Resolution Process since the National Company Law Tribunal initiated proceedings in 2019. Anish Niranjan Nanavaty has been serving as the resolution professional since June 28, 2019.

One of the cases involves a New York apartment owned through RCom’s US step-down subsidiary Bonn Investment Inc. The property at 400 W 12th Street was sold for $8.34 million, or around Rs 78.95 crore, without authorisation from the resolution professional.

The proceeds were subsequently linked to an unauthorised $25 million commitment involving AZCO Real Estate Brokers LLC. Following a digital forensic review, the resolution professional initiated proceedings under Section 66(1) of the Insolvency and Bankruptcy Code over alleged fraudulent trading. An appeal before the National Company Law Appellate Tribunal was scheduled for hearing on August 13, 2026.

Regulatory scrutiny has also intensified. The Directorate of Enforcement has issued provisional attachment orders covering properties belonging to Reliance Realty and Campion Properties.

The Central Bureau of Investigation also conducted searches at RCom’s Navi Mumbai DAKC headquarters between February and May 2026, reportedly seizing board minutes, financial records and committee documents.

RCom’s legacy telecom liabilities remain another significant obstacle.

The Department of Telecommunications continues its special audit of the company. RCom’s cumulative adjusted gross revenue-related liability is estimated at Rs 63,765 crore up to FY26, with another Rs 2,316 crore added during the latest quarter.

Disputes relating to spectrum licence migration and bank guarantee encashment remain pending before the NCLT, Telecom Disputes Settlement and Appellate Tribunal and the Supreme Court of India.

RCom’s standalone current ratio stood at 0.10, while total debt to total assets was 0.99. Its current liability ratio stood at 0.93 and debtor turnover was 132 days.

With the resolution process still facing delays, major regulatory claims outstanding and liabilities continuing to dwarf the company’s financial resources, RCom remains caught in a long-running financial and legal deadlock. The quarter may have brought a smaller headline loss, but the underlying problems remain anything but disconnected.