Mahanagar Telephone Nigam submitted its Business Responsibility and Sustainability Report (BRSR) for FY26 to stock exchanges on September 5, 2026. The filing details the company's operational transition as it hands over telecom services to Bharat Sanchar Nigam Limited (BSNL) while focusing on asset monetization.

Operational Restructuring

The report confirms that BSNL has undertaken the maintenance and operational activities of MTNL's telecom services in Delhi and Mumbai effective January 1, 2025. Under a service agreement dated November 22, 2024, BSNL is responsible for capital expenditure (CAPEX) and operating expenses (OPEX) related to these operations. MTNL will retain its land and building assets to discharge loan liabilities.

Financial Overview

For FY26, MTNL reported a total turnover of ₹1468.81 crore. Infrastructure leasing contributed the largest share at 34.53% of turnover, followed by basic and other telecom services at 25.96%. The company recorded a net worth of negative ₹29974.84 crore.

Regulatory Penalties

MTNL disclosed monetary penalties imposed by regulators during the fiscal year. The National Stock Exchange and BSE levied a fine of ₹65.67 lakh for non-compliance with board composition requirements regarding independent directors. Additionally, the Telecom Regulatory Authority of India (TRAI) imposed multiple financial disincentives totaling approximately ₹50 lakh for violations of Quality of Service regulations across broadband and wireline services.

What the Numbers Show

The revenue mix indicates a structural shift away from active service provision. With infrastructure leasing accounting for nearly one-third of turnover and wireless activities contributing just 1.15%, the data reflects the successful offloading of core telecom operations to BSNL. The absence of CAPEX allocation for FY26 further validates this transition to an asset-holding model.

Human Capital & Compliance

The company employed 2795 permanent employees as of March 31, 2026, with a turnover rate of 0.515%. CSR provisions under Section 135 of the Companies Act were not applicable due to the company's financial position. The report notes that no disciplinary actions were taken against directors or employees for bribery or corruption charges.

Mahanagar Telephone Nigam Limited reported a standalone net loss of ₹3,101.50 crore for FY26, narrowing from ₹3,341.36 crore in FY25, as total income rose to ₹1,468.81 crore from ₹1,279.75 crore.

Financial Performance Overview

The company's standalone revenue from operations declined to ₹887.27 crore in FY26 from ₹1,060.54 crore in FY25, a decrease of ₹173.27 crore. However, other income surged to ₹581.54 crore from ₹219.21 crore, an increase of ₹362.33 crore, driven largely by a gain on sale of property, plant and equipment of ₹410.95 crore. Total expenses fell to ₹4,571.76 crore from ₹4,603.26 crore in the prior year.

The following table summarises the standalone and consolidated financial highlights for FY26:

Segment-wise Performance

MTNL operates across three segments. The table below shows segment revenue for FY26 versus FY25:

Infrastructure leasing, which includes tower rent of ₹51.75 crore and rental income of ₹455.39 crore, contributed ₹507.14 crore in FY26, up from ₹431.59 crore in FY25. Basic and other services revenue fell sharply to ₹364.37 crore from ₹616.18 crore.

BSNL Service Agreement and Revenue Sharing

MTNL and BSNL entered into a Service Agreement on November 22, 2024, under which BSNL assumed responsibility for the maintenance and operational activities of MTNL's telecom services with effect from January 1, 2025. Under this arrangement, BSNL bears capital expenditure and operating expenditure for telecom operations in Delhi and Mumbai. Certain customers were migrated to BSNL with effect from April 1, 2025, with billing and collection handled by BSNL for those customers. Revenue share against migrated customers, amounting to ₹156.51 crore (Delhi Unit ₹69.84 crore and Mumbai Unit ₹86.67 crore), was recognised by MTNL during FY26.

Asset Monetisation

During FY26, MTNL realised ₹419.15 crore through asset monetisation:

Sixteen properties have been identified for monetisation in FY27 through direct sale or transfer to government departments and open-market auction.

Debt and Credit Position

Total financial indebtedness as at March 31, 2026 stood at ₹36,314 crore, comprising bank loans of ₹9,263 crore, sovereign guarantee bonds of ₹24,071 crore, and a loan from the Department of Telecommunications for sovereign guarantee bond interest payments of ₹2,980 crore. All bank loan accounts have been classified as Non-Performing Assets by lender banks. Defaults on term loan principal repayment amounted to ₹2,145.73 crore and on interest repayment amounted to ₹501.45 crore as at March 31, 2026.

Credit ratings reaffirmed during FY26 are summarised below:

Capital Structure and Dividend

The authorised share capital as at March 31, 2026 stood at ₹10,000 crore, comprising 65 crore preference shares of ₹100 each and 350 crore equity shares of ₹10 each. Paid-up equity share capital remained at ₹630 crore, comprising 63 crore equity shares of ₹10 each. The Government of India (President of India) held 56.25% of the equity as at March 31, 2026. No dividend was declared for FY26, as the company has not reported operating profit.

Subsidiaries and Joint Ventures

Key performance highlights of subsidiaries and joint ventures for FY26:

MTL declared a final dividend of ₹0.28 crore for FY26, subject to shareholder approval. MSITSL recommended a dividend of 50% on paid-up share capital for FY26, down from 75% in the prior year.

Going Concern and Auditor's Report

The statutory auditors issued an adverse opinion on the standalone and consolidated financial statements for FY26, citing the fully eroded net worth, continuous net cash losses, current liabilities substantially exceeding current assets, and defaults on bank loan repayments aggregating ₹9,262.53 crore. The auditors also noted a material uncertainty related to going concern. The standalone net worth as at March 31, 2026 was negative at ₹(29,974.84) crore.

The Comptroller and Auditor General of India noted that spectrum usage charges demand of ₹671.56 crore raised by the Department of Telecommunications was not recognised as a liability in the financial statements, resulting in an understatement of expenses and liabilities by that amount.

40th Annual General Meeting

The 40th Annual General Meeting of MTNL is scheduled to be held on Wednesday, September 30, 2026 at 11:30 AM through Video Conferencing/Other Audio Visual Means. The record date for the AGM is September 23, 2026, and the register of members will remain closed from September 24, 2026 to September 30, 2026.