Tejas Networks Q3 Loss Hits ₹197 Crore on BSNL Order Delay

Introduction

Domestic telecom equipment manufacturer Tejas Networks has reported a consolidated net loss of ₹196.55 crore for the third quarter of fiscal year 2026, which ended on December 31, 2025. This marks the company's second consecutive quarterly loss and represents a significant reversal from the ₹165.67 crore profit recorded in the same period of the previous fiscal year. The sharp downturn is primarily attributed to a substantial decline in sales, exacerbated by the deferment of a major purchase order from the state-owned telecom operator, Bharat Sanchar Nigam Limited (BSNL).

Detailed Financial Performance

The company's financial results for the quarter reveal a stark contrast to its performance a year ago. Revenue from operations plummeted by 88.89% to ₹306.79 crore, a steep fall from the ₹2,642.24 crore generated in Q3 FY25. However, on a sequential basis, revenue saw a modest growth of 17% from the ₹261.82 crore reported in the second quarter of FY26, indicating some operational stabilization. At an operational level, the company posted an EBIT (Earnings Before Interest and Tax) loss of ₹239 crore, a sharp decline from the operating profit of ₹260 crore in the corresponding quarter of the previous year. The pre-tax loss for the quarter stood at ₹302.87 crore, compared to a profit before tax of ₹211.27 crore in Q3 FY25.

The BSNL Order Deferment

A critical factor behind the weak quarterly performance was the delay of a significant purchase order from BSNL. The order, valued at ₹1,526 crore for the supply of equipment for 18,000 sites, was deferred during the quarter. Tejas Networks is a key vendor for BSNL's 4G network rollout as part of the C-DOT-TCS consortium and is a major supplier of network routers. The postponement of this large-scale order created a substantial gap in the company's revenue execution for the period, directly impacting its top and bottom lines.

Operational Highlights and Balance Sheet

Despite the revenue shortfall, Tejas Networks maintained a significant inventory level of ₹2,363 crore as of December 2025. The management has stated that this inventory is slated to be converted into finished goods and shipped in the upcoming months, which could support revenue recovery in subsequent quarters. The company's cash and cash equivalents stood at ₹537 crore at the end of the quarter. In terms of revenue composition, the domestic market continued to be the primary contributor, accounting for approximately 85% of the revenue mix, while international markets made up the remaining 15%.

Nine-Month Financial Summary

The challenges of the third quarter are reflected in the company's performance for the first nine months of the fiscal year. For the period ended December 31, 2025, Tejas Networks recorded a cumulative net loss of ₹697.55 crore. The revenue from operations for this nine-month period also saw a sharp decline of 89%, falling to ₹793.69 crore. This underscores the sustained impact of order delays and a challenging business environment on the company's financial health over the fiscal year.

Strategic Wins and Government Support

While the financial results were weak, Tejas Networks secured several strategic wins that signal potential for future growth. The company reported multiple new contracts for private 5G deployments in India, with applications in critical sectors such as ports and mines. Furthermore, it was selected as the 5G radio access network (RAN) supplier for a section of the Delhi-Mumbai railway corridor. This is part of a pilot project for the Indian Railways' Kavach safety system. During the quarter, the company also received ₹84.95 crore in incentives under the government's Production-Linked Incentive (PLI) scheme for the March 2025 quarter. This brought the total PLI incentive received by the company to ₹397 crore, providing some financial support.

Management Outlook

Despite the near-term headwinds, the company's management expressed a positive long-term outlook. This optimism is supported by strong structural drivers in the telecom industry, including the growth in data traffic driven by AI applications, the ongoing expansion of 4G networks, and new 5G deployments in emerging markets. The company also noted increasing traction for its new products in both Indian and international markets. Arnob Roy, COO of Tejas Networks, stated that revenue in Q3 was largely driven by the sale of wireline products to private and international customers, and the company is engaged in multiple field trials for its wireless products.

Conclusion

Tejas Networks faced a difficult third quarter in FY26, with a significant loss and a drastic fall in revenue, primarily due to the deferment of a key BSNL order. The results led to a negative market reaction, with the company's shares falling 5.68% following the announcement. However, the company's substantial inventory, strategic wins in the private 5G and railway sectors, and continued support from the PLI scheme provide a foundation for potential recovery. The focus now shifts to the execution of its order book and the conversion of its inventory to revenue in the coming quarters.