RCOM - Reliance Communi

📊 NSE: RCOM 🏢 Telecommunications - Service Provider 📅 Last Updated: 12/14/2025 11:47

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue for FY25 was INR 391 Cr. India Operations contributed INR 386 Cr (98.7% of total), while Global Carrier Business contributed INR 8 Cr (2% of total). Reliance Communications Infrastructure Limited (RCIL) revenue grew 33.3% YoY to INR 12 Cr from INR 9 Cr.

Geographic Revenue Split

India Operations represent 98.7% of total revenue (INR 386 Cr), with Global Operations contributing the remaining 1.3% (INR 8 Cr).

Profitability Margins

The company recorded a Net Profit Margin of (-) 43.02% and an Operating Profit Margin of (-) 35.78% for continuing operations in FY25. Net loss after tax was INR 186 Cr.

EBITDA Margin

Consolidated EBITDA was INR 21 Cr with an EBITDA margin of 5.46%. India Operations EBITDA was INR 40 Cr, while Global Carrier Business recorded an EBITDA loss of INR 17 Cr.

Capital Expenditure

Planned capex expansion needs are mentioned as being managed through sharing agreements to lower regulatory cash outflows, though specific INR Cr values for future capex are not disclosed. Historical loan diversion of INR 1,000 Cr from BOB was intended for capital expenditure but partially diverted.

Credit Rating & Borrowing

Liquidity is rated as 'Poor' with a 'Delay in servicing of debt obligation' status. Interest Coverage Ratio is 0. Overall gearing is Not Meaningful (NM) due to negative equity of INR 91,495 Cr.

⚙️ Operational Drivers

Raw Materials

Interconnect usage charges (IUC) and regulatory levies represent the primary operational costs for the telecom service business.

Capacity Expansion

The company serves nearly 2,000 Indian corporations. Planned expansion focuses on the Enterprise customer base across India and globally through products like VPN and SIP Trunking.

Raw Material Costs

Total operating expenditure stood at INR 370 Cr, representing 94.6% of revenue. Interconnect usage charges and regulatory levies are key components of these costs.

Manufacturing Efficiency

Not applicable as a service provider; however, the company has transitioned to a 'pure play B2B operator' to better utilize resources for the enterprise segment.

📈 Strategic Growth

Expected Growth Rate

Not disclosed in available documents

Growth Strategy

The company aims to grow revenue by expanding its portfolio of service offerings (VPN, SIP Trunk, IP Centrex) and focusing on the B2B Enterprise segment. It also focuses on cost management and margin expansion through sharing agreements to reduce operating costs.

Products & Services

VPN, Next-Generation Enterprise Networking, Branch Connect, IP Centrex, SIP Trunk, Mobile SIP trunk, SIP Toll-Free Service, and National/International Long Distance (NLD/ILD) voice services.

Brand Portfolio

Reliance Communications (RCOM).

New Products/Services

New enhancements in the solutions portfolio include Next-Generation Enterprise Networking and SIP Toll-Free Services aimed at increasing the Enterprise customer base.

Market Expansion

Targeting growth in the Enterprise segment across India and globally through specific sales and marketing initiatives.

Strategic Alliances

Sharing agreements entered into to lower regulatory cash outflows and future capex expansion needs.

🌍 External Factors

Industry Trends

The Indian telecom industry has 1,200 million subscribers and 900 million internet users as of March 2025. There is a strong shift toward wireless internet, which accounts for 97% of the subscriber base.

Competitive Landscape

The company shut down mobile operations due to high debt and a failed merger with Aircel, now operating as a distressed pure-play B2B operator.

Competitive Moat

The company's moat is centered on its specialized B2B enterprise strengths and established network for long-distance services, though this is currently weakened by insolvency proceedings.

Macro Economic Sensitivity

Sensitive to changes in government regulations, tax laws, and economic developments within India and globally.

Consumer Behavior

Enterprise demand is shifting toward integrated networking solutions like VPN and SIP trunking for branch connectivity.

Geopolitical Risks

Global economic developments are cited as factors affecting the company's operations and financial condition.

⚖️ Regulatory & Governance

Industry Regulations

Operations are heavily regulated by interconnect usage charges, tariff determinations, and government levies which impact cash flows.

Taxation Policy Impact

The company recorded a tax credit of INR 4 Cr in FY25.

Legal Contingencies

Union Bank of India classified RCOM's loan accounts as 'Fraud' in December 2025. Investigations revealed siphoning of INR 5,525 Cr to a connected entity (Netizen) and fictitious debtors. Open charges of INR 49,111 Cr exist against assets valued at only INR 26,163 Cr. The company is currently under CIRP at the NCLT Mumbai Bench.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the outcome of the CIRP and the approval of the resolution plan. Fraud classification by Union Bank poses significant legal and reputational risks with potential impact on the resolution process.