Tejas Networks has reported its Q2 FY27 financial results, showing a sharp recovery in revenue and a reduction in losses. However, the company’s rising debt and continuing operating losses remain important concerns for investors.

The Tata Group-backed telecom equipment manufacturer reported consolidated revenue from operations of ₹406 crore for the quarter ended September 30, 2026, compared with ₹262 crore in the corresponding quarter last year.

This represents approximately 55% year-on-year revenue growth, reflecting improved execution across its telecom networking businesses.

Despite higher revenue, Tejas Networks reported a consolidated net loss of ₹207 crore, compared with a loss of ₹307 crore in Q2 FY26.

The ₹100 crore reduction in quarterly losses indicates meaningful improvement, although the company has not yet returned to profitability.

The biggest positive surprise came from the company’s order book, which expanded substantially during the quarter.

Tejas Networks reported an order book of ₹2,315 crore at the end of September 2026, compared with ₹1,529 crore at the end of June.

This represents approximately 51% sequential growth and provides better visibility into potential future revenue.

However, investors should distinguish between receiving orders and converting those orders into profitable revenue.

The company’s EBITDA loss narrowed to ₹108 crore from ₹293 crore in the corresponding quarter last year. This improvement suggests that the operating loss burden has reduced significantly as revenue recovered.

Nevertheless, EBITDA remained negative, highlighting the need for further improvements in scale, pricing and operating efficiency.

Sequentially, revenue increased only marginally from ₹402 crore in Q1 FY27 to ₹406 crore in Q2 FY27.

This means that while annual revenue growth was impressive, the business remained relatively stable compared with the immediately preceding quarter.

More importantly, the company’s EBITDA loss widened from ₹99 crore in Q1 FY27 to ₹108 crore in Q2 FY27.Its net loss also increased slightly from ₹202 crore in the June quarter to ₹207 crore in the September quarter.

These sequential movements show that the company’s recovery is not yet progressing uniformly across every financial measure.

The implied EBITDA margin improved substantially year-on-year, from approximately negative 112% to negative 27%.

However, the sequential EBITDA margin deteriorated from approximately negative 25% in Q1 FY27.

The contrast between strong year-on-year improvement and weaker sequential profitability is an important consideration for investors evaluating the turnaround.

Another major development was the company’s receipt of a Letter of Intent from Tata Consultancy Services for supplying 4G radio access network equipment to 18,865 additional BSNL sites.

The order is connected with the expansion of BSNL’s nationwide 4G network. Tejas Networks confirmed that supplies against this order commenced during Q2 FY27.

The company also began initial deliveries for an end-to-end 5G network project in South America that it had secured during Q1 FY27.

These developments demonstrate that Tejas Networks is pursuing opportunities in both the domestic telecom infrastructure market and international wireless networks.

Management also highlighted continued global demand for its advanced optical networking products, including 400G and 800G coherent DWDM equipment.

Such products are relevant to high-capacity communication networks, enterprise connectivity, data centres and broadband infrastructure.

The company reported progress in international wireless opportunities, including advanced commercial discussions and proof-of-concept selections in North America and Asia-Pacific.

It also received a Letter of Intent to supply IP routers for BharatNet Phase 3 infrastructure in three Indian states. These developments broaden the potential growth opportunities beyond a single customer or project.

However, the company’s financial position remains a significant challenge. Net debt increased to ₹4,384 crore at the end of Q2 FY27, compared with ₹4,277 crore in the previous quarter.

Gross debt stood at ₹4,835 crore, while cash and cash equivalents were approximately ₹451 crore. Management attributed the increase in net debt to additional funding requirements for operations and capital expenditure.

Working capital declined to ₹4,235 crore from ₹4,478 crore, supported partly by lower trade receivables. Inventory also reduced to ₹2,314 crore from ₹2,358 crore, with a significant portion expected to support BSNL 4G expansion deliveries.

For investors, the key question is whether stronger order execution can improve cash collections sufficiently to reduce borrowing requirements.

Tejas Networks competes in a sector where companies such as HFCL and Sterlite Technologies also participate in telecom networking and optical infrastructure opportunities.

While their business models and product portfolios differ, comparing order conversion, margins, debt and cash generation can help investors assess relative execution strength.

The company’s growing order book, international opportunities and narrowing year-on-year losses provide reasons to monitor its recovery closely, but they do not eliminate financial risks.

The coming quarters will determine whether Tejas Networks can translate its ₹2,315 crore order book into sustainable revenue growth, positive EBITDA, stronger cash flow and a healthier balance sheet.