Sterlite Technologies Q3 Results Review - Inline; Continues To Gain Market Share In OFC Market: Yes Securities

Yes Securities Report

Sterlite Technologies Ltd. reported inline operating performance for the quarter. Both, the sequential revenue growth and Ebitda margin were as per expectation. It reported revenue growth of 11.8% QoQ, led by 12% QoQ increase in global networking segment; the global services segment declined by 8% QoQ as it continues to realign its services segment with higher focus on profitability.

There was sequential decline in Ebitda margin(down 81 basis points QoQ) on higher cost. Order book grew 4.5% QoQ to Rs 121 billion. Sterlite Technologies is expected to benefit from multi‐year digital creation cycle led by 5G, FTTx and fibre demand from hyperscalars.

Also, optical fibre cable prices are on the rise globally and should benefit Sterlite Technologies. It has been gaining market share in global optical fibre cable market.

The rise in revenue mix from international clients is in right direction. It plans to increase attach rate to 40% by Q4 FY25. We expect Ebitda margin to improve going ahead led by easing off certain cost pressure related to raw material and logistics. It has been able to pass some increase in cost to customers. The moderation in capex intensity will help to keep debt under control.

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