Three cost lines are growing at 2–3× the pace of revenue, directly compressing Data Services margins. Network and transmission costs — the single largest expense — rose 12.8% YoY to ₹2,836.31 crore (from ₹2,513.40 crore), nearly twice the 6.7% revenue growth rate.
Depreciation and amortisation accelerated even faster: up 17.9% YoY to ₹751.28 crore — close to three times revenue growth — as the company's infrastructure buildout flows through the P&L. Data Services segment assets expanded by ₹1,580 crore YoY to ₹20,107.89 crore, and every rupee of that investment is now showing up as higher D&A charges.
Employee benefits expense added further pressure at +7.8% YoY to ₹1,211.49 crore. Together, these three lines total ₹4,799.08 crore — 77.5% of revenue from operations in Q3 FY26, up from 73.8% a year earlier. The result: Data Services segment profit fell 16% YoY to ₹280.76 crore even as its revenue climbed to ₹5,379.81 crore.