Are Reliance Communications Ltd latest results good or bad?

Reliance Communications Ltd's latest financial results for Q2 FY26 reveal a challenging operational landscape. The company reported a net loss of ₹86.00 crores, which reflects a significant deterioration compared to previous quarters. Revenue for the same period was ₹87.00 crores, showing a modest sequential growth of 4.82% from the prior quarter, although this represents a year-on-year decline of 1.14%. The operating margin, excluding other income, fell to -62.07%, marking the lowest performance in seven quarters. This decline highlights ongoing operational inefficiencies and challenges in scaling the business effectively within a highly competitive telecom sector. The company's market capitalization remains low at ₹382 crores, and it faces substantial legacy liabilities, contributing to a negative book value of ₹330.77 per share. The balance sheet indicates severe distress, with shareholder funds at a negative ₹91,490 crores, underscoring years of operational losses and value erosion. Current liabilities significantly exceed current assets, leading to a working capital deficit that raises concerns about liquidity and the ability to meet financial obligations. In terms of cash flow, the company generated only ₹26.00 crores from operations, a slight improvement from the previous year but still far below sustainable levels. The overall financial performance reflects a company grappling with fundamental challenges, and the outlook remains uncertain. Additionally, the company saw an adjustment in its evaluation, indicating a shift in the perception of its financial health. The ongoing operational struggles, coupled with a lack of institutional interest and a significant decline in promoter holdings, suggest that Reliance Communications is facing a critical juncture in its business trajectory.