Mahanagar Telephone Nigam Limited ( Mahanagar Telephone Nigam ) reported a significant narrowing of its net loss for the first quarter of FY26, driven by improved operational metrics compared to the corresponding period last year.

The state-run telecommunications enterprise posted a consolidated net loss of ₹842.36 crore for the quarter ended June 30, 2026, down sharply from the ₹3,107.12 crore loss recorded in Q1FY25. On a standalone basis, the loss was ₹841.07 crore, compared with ₹3,102.94 crore a year ago. The improvement marks a substantial reduction in quarterly losses, although the company continues to operate at a deficit.

Financial Performance

Revenue from operations showed modest growth year-on-year. Standalone total income from operations rose to ₹200.08 crore in Q1FY26 from ₹158.14 crore in Q1FY25. Consolidated revenue increased to ₹216.89 crore from ₹172.22 crore during the same period.

Despite the revenue growth, the company’s profitability remains under pressure. The basic earnings per share (EPS) stood at a loss of ₹13.35 on a standalone basis and ₹13.37 on a consolidated basis, an improvement from the losses of ₹49.25 and ₹49.32 respectively in the prior year quarter.

Balance Sheet and Debt Position

The company’s balance sheet reflects ongoing capital requirements. As on June 30, 2026, the consolidated net worth remained negative at ₹(30,122.04) crore, widening slightly from ₹(27,186.00) crore at the end of FY25. Outstanding debt capital stood at ₹26,325.92 crore, marginally higher than the ₹25,948.33 crore reported in March 2026.

The debt-to-equity ratio, calculated on a consolidated basis, was (1.18) times for Q1FY26, compared with (1.29) times in the preceding quarter and (1.16) times in Q1FY25. The Debt Service Coverage Ratio (DSCR) and Interest Service Coverage Ratio (ISCR) both stood at 0.06 times, indicating limited operational cash flow relative to debt obligations.

What the Numbers Show

The divergence between the narrowing net loss and the widening negative net worth highlights the structural nature of MTNL’s financial challenges. While the current quarter’s loss reduced by over 72% year-on-year, the accumulated deficit continues to grow, as evidenced by the decline in net worth from ₹27,186.00 crore to ₹30,122.04 crore between March and June 2026. This suggests that despite improved quarterly performance, the company’s historical losses continue to weigh heavily on its equity base.

The Board of Directors approved the unaudited standalone and consolidated financial results in its meeting held on August 12, 2026. The results were reviewed by the Audit Committee in its meeting on the same date.

Mahanagar Telephone Nigam Limited ( Mahanagar Telephone Nigam ) reported a narrowed standalone net loss of ₹841.07 crore for the quarter ended June 30, 2026, down from ₹941.03 crore in the corresponding period of FY25. The telecom enterprise saw its revenue from operations rise 26.5% year-on-year to ₹200.08 crore, driven by higher income from infrastructure leasing and basic services.

The Board of Directors approved the unaudited financial results on August 12, 2026. While the top-line expanded, the bottom-line remained under pressure due to high finance costs, which stood at ₹747.51 crore for the quarter. The company’s consolidated net loss was ₹842.36 crore, compared to ₹943.15 crore in Q1FY25.

Financial Performance

Revenue from operations increased significantly across key segments. Infrastructure leasing revenue grew 19% year-on-year to ₹126.53 crore, while basic and other services revenue rose 46.5% to ₹69.96 crore. Cellular revenue, however, declined slightly to ₹3.88 crore from ₹4.20 crore a year ago.

Other income surged 121.5% to ₹74.53 crore, contributing to total income of ₹274.61 crore. Despite this, total expenses remained elevated at ₹1,115.68 crore, primarily due to finance costs and employee benefits of ₹136.57 crore.

What the Numbers Show

The financial data reveals a stark divergence between operational revenue growth and profitability. While revenue from operations grew 26.5% year-on-year, finance costs constituted approximately 373% of total operating revenue. This indicates that despite improvements in core business revenues, the company’s ability to generate operating profit is severely constrained by its debt servicing obligations. The debt service coverage ratio remained weak at 0.06 times, highlighting limited capacity to meet debt obligations from operating cash flows.

Auditor Qualifications and Going Concern

Statutory auditors O P Bagla & Co LLP and S.L. Chhajed & Co LLP issued a qualified conclusion on the financial statements. Key concerns included:

• Unreconciled balances with Bharat Sanchar Nigam Limited (BSNL), with a net recoverable amount of ₹3,961.05 crore pending confirmation.
• Outstanding payables to the Department of Telecommunications (DoT) amounting to a net ₹428.28 crore, also subject to reconciliation.
• Non-compliance with Ind AS 116 (Leases) and Ind AS 109 (Financial Instruments) regarding expected credit losses.
• Manual billing practices in certain Mumbai and Delhi units due to software downtime, affecting revenue accuracy.

The auditors emphasized that the company has a negative net worth of ₹30,801.34 crore and has defaulted on bank loan repayments totaling ₹3,119.49 crore. All bank loans have been classified as non-performing assets. However, the financials were prepared on a going concern basis, citing continued government support, including sovereign guarantee-backed bonds and soft loans for interest servicing.

Segment-wise Performance

The infrastructure leasing segment contributed positively to segment results with ₹101.71 crore, up from ₹80.59 crore in Q1FY26. In contrast, the cellular segment incurred a loss of ₹95.16 crore, while basic and other services posted a segment loss of ₹106.87 crore, though this improved from a loss of ₹154.91 crore a year ago.