Reliance Communications Limited

Communication Services — Telecom Services · NSE

₹0.84−₹0.01 (−1.18%)

DalalBaazaar Score

16 / 100

🔴 Poor

Verdict

HIGH RISK

Risk

Very High

Driven by negative shareholders' equity — the company owes more than it owns, short-term liabilities exceed short-term assets, negative free cash flow.

In simple words: The company owes more than it owns — years of losses have wiped out its net worth, but sales are shrinking. Solvency — whether it can keep funding itself at all — is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:00 pm

Understanding the Business

Company site ↗

The 60-second version of Reliance Communications Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Reliance Communications Limited provides wireline and wireless telecom services to the business and government segments. The company was formerly known as Reliance Communication Ventures Limited and changed its name to Reliance Communications Limited in June 2006.

IndustryTelecom Services

SectorCommunication Services

Annual revenue₹314 Cr

How does it make money?

Turns over ₹314 Cr a year. Of every ₹100 of sales, about ₹-3543 reaches shareholders as profit, with ₹-50 left at the operating level before interest, tax and depreciation.

Who are its competitors?

The closest listed comparisons in its industry are BHARTI AIRTEL LIMITED, VODAFONE IDEA LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved -34% while net margin moved +17% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect-34%

Margin effect+17%

DalalBaazaar Score

16/ 100

Poor

Weighted across six categories. Every point is explained below.

✗ Shareholders' equity is negative — accumulated losses exceed the capital in the business

Quality vs. Valuation

Company Quality

15/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

30/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

Weak on business quality and not cheap enough to compensate.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

N/A

Multiples unreliable — equity base is negative

EV/EBITDA

—

PEG

—

Red Flags

8 items require attention · 4 high · 4 watch

🔴Negative shareholders' equityFinancial
Liabilities exceed assets — accumulated losses have wiped out the company's net worth.
🔴Thin interest coverageFinancial
Operating profit covers interest only -10.1x — little room if earnings dip.
🔴The company is lossmakingFinancial
Net profit of -₹11,125 Cr in the latest reported year.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 54.1 points, from 4.4% to -49.7%.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from -3.0x to -10.1x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹14 Cr in the latest year.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.23 — near-term obligations exceed near-term assets.
🟡Low reported insider holdingOwnership
Reported insider holding is 1.6%. For Indian companies this field is an unreliable proxy — check the official promoter shareholding in the exchange filing.

Investment Thesis

🟢 Bull CaseWhat could make this work?

No clear supporting case emerges from the available numbers.

🔴 Bear CaseWhat could go wrong?

Solvency comes before everything else
Liabilities exceed assets. Until net worth is rebuilt, the equity is a claim on a business that owes more than it owns, and further losses or a funding squeeze can leave shareholders with nothing.
Margins are being competed away
EBITDA margin has fallen from 4.4% to -49.7%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
4 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above -52%✓ -49.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹14 Cr
Profit that never becomes cash eventually stops being profit.
3Interest cover stays above 3x✗ -10.1x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

3 / 9 checks passed

✗ Shareholders' equity is positive (assets exceed liabilities)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✗ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

0 good · 4 neutral · 7 weak

Market Cap

₹232 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not meaningful

Loss-making

Earnings are negative, so a P/E multiple can't be read here

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

₹-0.02

Loss-making

Negative earnings per share — the business is losing money

ROE

Not meaningful

Negative equity

Return on equity can't be read when equity itself is negative

ROCE

Not available

No data

Source didn't return this field

Debt/Equity

Not meaningful

Negative equity

Shareholders' equity is negative, so this ratio can't be read

Revenue Growth (YoY)

-10.8%

Shrinking

Sales are contracting

Profit Growth (YoY)

-18.5%

Falling

Profits are shrinking

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹14 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

-0.1x

Operating Margin

-8.1%

Weak

Thin margins leave little room for error

Net Margin

0.0%

Weak

Very little revenue reaches the bottom line

Current Ratio

0.23

Tight

Tight short-term liquidity

Beta (vs Nifty)

0.80

Defensive

Steadier than the market

52W Range Position

13%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

0.9 / 0.9

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

22.2

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹479 Cr	₹383 Cr	₹358 Cr	₹314 Cr	-13.1%
EBITDA	₹21 Cr	₹37 Cr	₹22 Cr	-₹156 Cr	—
EBITDA Margin	4.4%	9.7%	6.1%	-49.7%	—
PAT (Net Profit)	-₹14,499 Cr	-₹7,212 Cr	-₹9,389 Cr	-₹11,125 Cr	—
EPS	₹-52.83	₹-26.28	₹-34.21	₹-40.54	—
Total Debt	₹47,261 Cr	₹47,232 Cr	₹47,216 Cr	₹47,212 Cr	-0.0%
Free Cash Flow	-₹64 Cr	-₹40 Cr	₹28 Cr	-₹14 Cr	—

🔴 Revenue has shrunk at 13.1% a year over 3 years.

🔴 EBITDA has turned negative, from ₹21 Cr to -₹156 Cr.

🔴 EBITDA Margin has fallen from 4.4% to -49.7% over 3 years (-54.1 pts).

🟡 Total Debt has been broadly flat over 3 years (-0.0% a year).

Balance Sheet & Cash Flow — FY2026

Total Assets

₹36,336 Cr

Total Liabilities

₹1.39 L Cr

Cash & Equivalents

₹174 Cr

Operating Cash Flow

-₹14 Cr

Capex

—

Shareholding (proxy)

Institutional Holding

4.1%

Insider Holding

1.6%

Corporate Actions

Ex-Dividend Date

14 Aug 2013

Peer Comparison

Company	P/E	ROE
BHARTI AIRTEL LIMITED	39.8x	20.2%
VODAFONE IDEA LIMITED	3.6x	—

Recent News

1 mixed5 general

Reliance Communications (NSEI:RCOM) - Stock Analysis

Simply Wall Street, 16 Oct

Reliance Communications Ltd. Upper Circuit: Price and Key Data

Univest, 01 Oct

Reliance Communications spectrum terminated by DoT over payment, roll-out violations

CNBC TV18, 06 Oct

Reliance Communications Q1 Results: Consolidated loss widens to ₹809 crore

scanx.trade, 13 AugResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Reliance Communications (RCOM.NS) Slides 4.72% to ₹1.01 as Penny Stock Tests Lower Support - Vol Target Rebalance

siam.in, 16 Sept

Reliance Communications Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 30 Aug

Watch Items

Revenue growth is negative (-10.8%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
2 metrics couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.
Reported insider holding is low — cross-check the official promoter shareholding % in the company's exchange filing.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

WeakBusiness Quality · Financial Health · Growth · Profitability · Valuation · Risk

Points for each in the Score ↑

Avoid until solvency is resolved

Reliance Communications Limited owes more than it owns. Whatever the operating numbers show, the equity is a residual claim on a business with negative net worth, and that question has to be settled before any of the rest is worth weighing. 4 high-severity red flags sit above this conclusion and should be read first.

2 of 3 tripwires tripped — Free cash flow remains positive; Interest cover stays above 3x · see Key things to watch ↑