Tarai Foods Limited announced its unaudited financial results for the third quarter ended December 31, 2025, revealing operational challenges with zero revenue from core business activities. The company, engaged in manufacturing fresh and frozen foods and vegetables, reported a net loss during the quarter under review.

Financial Performance Overview

The company's Q3FY26 results showed a significant decline in profitability compared to the same period last year. Key financial metrics for the quarter demonstrate the company's current operational difficulties.

Expense Analysis

Despite zero operational revenue, the company incurred total expenses of ₹11.40 lacs during Q3FY26. The expense breakdown reveals ongoing operational costs across various categories.

Nine-Month Performance

The company's nine-month performance for the period ended December 31, 2025, reflected continued operational challenges. Total revenue remained minimal at ₹0.50 lacs, while the cumulative net loss reached ₹35.60 lacs. Employee benefit expenses for the nine-month period totaled ₹6.80 lacs, with depreciation costs of ₹12.00 lacs.

Balance Sheet Position

As of December 31, 2025, the company's balance sheet showed total assets of ₹278.00 lacs, comprising non-current assets of ₹192.00 lacs and current assets of ₹86.00 lacs. The equity position remained negative at ₹310.00 lacs, with share capital of ₹1,536.00 lacs offset by negative other equity of ₹1,847.00 lacs.

Corporate Governance

The Board of Directors approved these unaudited financial results at their meeting held on February 14, 2026. The results were reviewed by the Audit Committee and accompanied by a limited review report from statutory auditors Sunil Vashisht & Co., Chartered Accountants. The company maintains its paid-up equity share capital at ₹1,536.41 lacs with a face value of ₹10.00 per share.

The Telecom Regulatory Authority of India (TRAI) has initiated its first comprehensive review of domestic leased circuits (DLCs) pricing in over a decade, potentially impacting costs for banks, IT firms, and data centres that rely on these dedicated high-speed broadband connections for critical operations.

Regulatory Review After Decade-Long Gap

TRAI released a consultation paper on Friday, seeking stakeholder comments by February 22 on the review of DLC tariffs. The regulator cited multiple factors driving this review, including market evolution and technological progress. According to TRAI, service providers currently offer tariffs well below prescribed ceilings on dense routes, suggesting that existing ceiling tariffs may not reflect prevailing market rates. However, remote and hilly regions continue facing high tariffs due to limited competition.

Domestic leased circuits are dedicated broadband lines that telecom operators provide to enterprise clients for secure, high-speed communication between offices, data centres, and operational hubs. These circuits operate at bandwidths ranging from 2 Mbps to 10 Gbps and sometimes higher, forming the backbone of enterprise connectivity.

Current Tariff Structure and Market Dynamics

TRAI currently prescribes tariff ceilings for four specific bandwidth capacities: 2 Mbps, 45 Mbps, 155 Mbps, and 622 Mbps. The most recent review in August 2014 resulted in significant tariff reductions of up to 60%. The current pricing structure shows substantial gaps between ceiling rates and actual market prices:

Currently, service providers offer discounts ranging from 30% to 99% below these ceilings, indicating that the 2014 limits are significantly higher than actual market rates.

Technological Advancements Drive Cost Reductions

TRAI highlighted that bandwidth costs have declined significantly due to advancements in transmission technologies. Fiber optics, dense wavelength division multiplexing (DWDM), and software-defined wide area network (SD-WAN) have reduced the unit cost of long-haul bandwidth. However, ceiling tariffs have not been revised to reflect these technological improvements and cost reductions.

Expanding Market Access for ISPs

The regulator is also seeking feedback on permitting internet service providers (ISPs) to provide domestic leased circuits directly. With upcoming Telecom Act rules, ISPs may be allowed to establish their own infrastructure or lease dark fiber from infrastructure providers and digital connectivity infrastructure providers to offer managed DLC services.

This expansion would enable ISPs to compete directly with national long distance operators in the DLC market, allowing more efficient monetization of existing network infrastructure and enhancing competition in the sector. Currently, smaller ISPs rely on circuits leased from larger operators to provide internet services.

VPN Services Under Regulatory Scrutiny

Another significant focus involves evaluating whether to bring virtual private network (VPN) services under the tariff regulation framework, ending their current unregulated status. Under 2014 rules, the government does not regulate VPN-based domestic leased circuits pricing. However, VPN market share has grown substantially from 30% in 2014 to 47% by 2023-24.

Industry players indicate that VPN-based circuits are likely to become the standard due to better scalability, flexibility, and cost-efficiency compared to traditional dedicated lines.

Industry Perspectives

The Cellular Operators Association of India (COAI), representing private telecom operators, argued in May submissions that the DLC market operates efficiently under competitive dynamics with tariffs already substantially below ceiling rates. COAI stated that further regulatory intervention is unnecessary given the absence of market failures and robust competition.

Conversely, the Broadband India Forum, representing big tech companies, wants TRAI to rationalize the current tariff structure. The forum emphasized that bandwidth provision costs have significantly decreased with the shift from legacy leased circuits to IP-based shared bandwidth, which should be considered in the current review exercise.