Any current/future new fundraising through debt or equity?

The company has approval for a rights issue raising up to Rs.1000 crores but there is no immediate plan; they continue to evaluate strategic needs and market conditions before deciding. Focus is on debt reduction with an internal target to reduce net debt by Rs.200-250 crores in FY24. Capex for FY24 has been reduced from Rs.350-400 crores to about Rs.250 crores to manage cash efficiently. No specific comments on new debt raising at this stage; monitoring market and demand conditions to decide. The demerger of the Global Service business will include transferring the specific debt attributable

Any current/future capex/capital investment/strategic investment?

The capex cycle has been largely completed with the operationalization of the US facility. The capex target for FY24 has been reduced from Rs. 350-400 crores to Rs. 250 crores. The reduction in capex is primarily due to deferral of phase II capacity-building investments at the US plant, waiting for demand to pick up. Current capital work in progress stands at Rs. 180 crores, mainly related to the US facility; capitalization will occur once lines are commissioned. Future capex focus will be minimal, limited to maintenance and no major new capacity additions beyond the US plant. Capital allocati

Future growth expectations in sales/revenue/volumes?

Revenue is expected to decline in FY24 due to inventory correction in North America and market challenges. Growth in North America market is likely to resume from Q1 FY25 onwards with ramp-up of US plant and demand recovery. Optical fiber cable (OFC) market share is stable and expected to grow from the second half of FY24 onwards. Fiber rollout in India shows strong progress with government-backed projects like BharatNet Phase 3 (Rs.1.39 lakh crore). Optical connectivity attach rates increased to 13% from 10% quarter-on-quarter; commercialization of new products will further improve this. Digi

Future growth expectations in earnings/operating earnings/profits/EPS?

Revenue is expected to decline in FY24 due to inventory correction in North America, with recovery anticipated from Q1 FY25 onwards. EBITDA margins have improved, with H1 FY24 EBITDA margin at 20.8% for the optical business and overall margin expansion of 230 bps Y-o-Y. STL Digital aims to achieve EBITDA breakeven by Q4 FY24, with revenue growing and EBITDA losses trending downwards. Capex cycle is complete with US facility operationalized; focus will be on improving factory utilization and reducing debt. Net debt reduction target is Rs. 200-250 crores for FY24, supporting financial health and

Current/ Expected Orderbook/ Pending Orders?

The open order book at the end of Q2 FY24 is Rs. 10,516 crores. The order book is well diversified across customer segments and businesses. The digital business has a healthy order book close to Rs. 750 crores. Discussions and progress are ongoing for the BharatNet Phase III project valued at around Rs. 1.4 lakh crores, with execution over 2.5-3 years and maintenance for 7 years. The T-Fiber project in the Global Services business is progressing with working capital employed of about Rs. 700 crores, though execution is complex and milestone-based. Ongoing demand recovery expected in North Amer

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Sterlite Technologies LtdQ3 FY23Telecom - Equipment & Accessories

Sterlite Technologies Ltd Q3 FY23 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹584P/E: 430.2Market Cap: ₹20.5K CrSector: Telecom - Equipment & Accessories

Management growth scorecard

Revenue

Category 5

Margin

Category 3

Fundraise

N/A

Order

N/A

Capex

Yes

1 of 3 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 5

→Revenue is expected to decline in FY24 due to inventory correction in North America and market challenges.
→Growth in North America market is likely to resume from Q1 FY25 onwards with ramp-up of US plant and demand recovery.
→Optical fiber cable (OFC) market share is stable and expected to grow from the second half of FY24 onwards.
→Fiber rollout in India shows strong progress with government-backed projects like BharatNet Phase 3 (Rs.1.39 lakh crore).
→Optical connectivity attach rates increased to 13% from 10% quarter-on-quarter; commercialization of new products will further improve this.
→Digital business growing rapidly with a strong order book (~Rs.750-780 crores), aiming for EBITDA breakeven by Q4 FY24.
→Global services business executing selectively with improving profitability.
→Medium-term demand for optical fiber cable volumes expected to grow to 623 million fiber kilometers by 2027 from 535 million in 2022.
→Market CAGR estimates: North America ~10.1%, Europe ~4.7%, India ~9.5% between 2023-2028.

Margin guidance

Category 3

→Revenue is expected to decline in FY24 due to inventory correction in North America, with recovery anticipated from Q1 FY25 onwards.
→EBITDA margins have improved, with H1 FY24 EBITDA margin at 20.8% for the optical business and overall margin expansion of 230 bps Y-o-Y.
→STL Digital aims to achieve EBITDA breakeven by Q4 FY24, with revenue growing and EBITDA losses trending downwards.
→Capex cycle is complete with US facility operationalized; focus will be on improving factory utilization and reducing debt.
→Net debt reduction target is Rs. 200-250 crores for FY24, supporting financial health and profitability.
→Growth is expected from increasing optical connectivity attach rates (improved from 10% to 13%) and market share expansion in India, EMEA, and APAC.
→Global services are focusing on select projects to improve profitability with an 81% increase in H1 FY24 EBITDA.
→Long-term growth driven by government projects like BharatNet Phase III and expanding 5G/data center markets.

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Fundraise plans

→The company has approval for a rights issue raising up to Rs.1000 crores but there is no immediate plan; they continue to evaluate strategic needs and market conditions before deciding.
→Focus is on debt reduction with an internal target to reduce net debt by Rs.200-250 crores in FY24.
→Capex for FY24 has been reduced from Rs.350-400 crores to about Rs.250 crores to manage cash efficiently.
→No specific comments on new debt raising at this stage; monitoring market and demand conditions to decide.
→The demerger of the Global Service business will include transferring the specific debt attributable to that business upon requisite approvals, but no additional debt raising disclosed.

Order book

→The open order book at the end of Q2 FY24 is Rs. 10,516 crores.
→The order book is well diversified across customer segments and businesses.
→The digital business has a healthy order book close to Rs. 750 crores.
→Discussions and progress are ongoing for the BharatNet Phase III project valued at around Rs. 1.4 lakh crores, with execution over 2.5-3 years and maintenance for 7 years.
→The T-Fiber project in the Global Services business is progressing with working capital employed of about Rs. 700 crores, though execution is complex and milestone-based.
→Ongoing demand recovery expected in North America from Q1 FY25, which should support new orders.
→Management is focused on capturing market share in key regions like North America, Europe, and India to fill volume gaps.

Capex plans

Yes

→The capex cycle has been largely completed with the operationalization of the US facility.
→The capex target for FY24 has been reduced from Rs. 350-400 crores to Rs. 250 crores.
→The reduction in capex is primarily due to deferral of phase II capacity-building investments at the US plant, waiting for demand to pick up.
→Current capital work in progress stands at Rs. 180 crores, mainly related to the US facility; capitalization will occur once lines are commissioned.
→Future capex focus will be minimal, limited to maintenance and no major new capacity additions beyond the US plant.
→Capital allocation priority going forward is towards debt reduction rather than aggressive capex.
→The company is also investing around Rs. 120 crores in its digital business in FY24, targeting EBITDA breakeven by Q4 FY24.

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