Tejas Networks' operating loss widens as costs outpace revenue
Q2 revenue rose +0.88% QoQ, but expenses grew +1.95%; management linked shipments to Optical, IP, FTTx, BSNL 4G and initial 5G deliveries.
Filed 16 Oct 2026, 18:24 IST · after market close · Tejas Networks Ltd (TEJASNET)
Key takeaways
- Consolidated operating loss widened to Rs 106.64 cr sequentially as expenses grew +1.95% while revenue rose only +0.88%.
- Net loss deepened +2.32% QoQ to Rs 206.94 cr, with interest up +1.72% and the tax rate lower by only 0.06 percentage points.
- Management said execution of the BSNL 4G order for more than 18,000 sites should support inventory reduction and its aim of quarterly positive EBITDA.
Price around the results
Initial BSNL and 5G shipments lift revenue only marginally
On a consolidated basis, revenue increased +0.88% QoQ to Rs 405.68 cr, but the rise was not enough to absorb the higher cost base. Management said Q2 shipments were driven by Optical, IP and FTTx products, initial BSNL 4G add-on shipments and the first deliveries of its end-to-end 5G solution to a South American customer. It also said it had received a letter of intent for more than 18,000 BSNL 4G sites.
Expense growth pushes operating margin down 1.33 percentage points
Expenses grew +1.95% QoQ, faster than revenue, widening the operating loss and taking operating margin down 1.33 percentage points to -26.29%. Interest expense also rose +1.72%, while depreciation declined -3.04%, so the sequential deterioration in pre-tax loss was mainly against a higher operating loss and financing cost. Other income represented -2.81% of pre-tax profit, meaning it did not cushion the loss; the 0.06-percentage-point reduction in the tax rate offered little offset.
The second straight quarter of negative operating margin
Operating margin remained negative for a second consecutive quarter, worsening from -24.96% in Q1FY27 to -26.29% in Q2. Net loss therefore deepened +2.32% QoQ to Rs 206.94 cr, while EPS moved to -Rs 11.62 from -Rs 11.37. The available quarter-on-quarter direction is a further deterioration in operating profitability rather than a recovery.
Management links execution to inventory, debt and profitability goals
Management said it aims to deliver the BSNL 4G expansion order within timelines and expects execution to reduce inventory and gross debt. The company also said it aims to achieve quarterly positive EBITDA financial performance, while expanding its 5G radio portfolio and adding 200G-and-beyond wireline access products. The results were filed after market close on 16 October 2026, so there is no market reaction to assess yet.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹406 cr | ₹402 cr | +0.88% |
| Other income | ₹8 cr | ₹9 cr | -13.38% |
| Expenses | ₹512 cr | ₹503 cr | +1.95% |
| Operating profit | ₹-107 cr | ₹-100 cr | -6.26% |
| Operating margin (%) | -26.29% | -24.96% | — |
| Interest | ₹87 cr | ₹85 cr | +1.72% |
| Depreciation | ₹91 cr | ₹94 cr | -3.04% |
| Profit before tax | ₹-277 cr | ₹-271 cr | -2.24% |
| Tax | ₹-70 cr | ₹-69 cr | -2.00% |
| Net profit | ₹-207 cr | ₹-202 cr | -2.32% |
| EPS (₹) | ₹-11.62 | ₹-11.37 | -2.20% |
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Q2 revenue was driven by Optical, IP and FTTx shipments, initial BSNL 4G add-on shipments and initial 5G shipments to South America.
- Tejas filed 26 patents in Q2 FY27, taking its cumulative global patent filing count to 748.
Guidance & outlook
- The company aims to deliver the BSNL 4G expansion order within timelines.
- The company expects execution of the BSNL order to significantly reduce inventory.
- The company aims to achieve quarterly positive EBITDA financial performance.
- The company says execution of the BSNL expansion order will reduce inventory and gross debt.
- The company reports a visible path to profitability through steadily improving financial performance.
Expansion
- Tejas is expanding its 5G radio portfolio across a larger number of frequency bands.
- Tejas plans to enhance its wireline portfolio with 200G-and-beyond access and high-capacity optical backbone products.
New orders
- Tejas received the LOI for more than 18,000 4G sites for BSNL's network expansion.
New initiatives
- Tejas inaugurated a connectivity lab focused on 5G-Advanced, 6G and AI-powered network intelligence research.
- Tejas is developing AI-based network management for optimization, fault prediction, resilience and capacity planning.
Competition
- Tejas expanded its BharatNet Phase 3 market share.
What to watch
- Whether operating margin improves from -26.29% in the next quarter.
- Whether expense growth falls below the +1.95% recorded in Q2 and moves closer to revenue growth of +0.88%.
- Progress on execution of the BSNL LOI for more than 18,000 4G sites, including the reported aim of quarterly positive EBITDA.