Sterlite Tech.

Sterlite Technologies reported consolidated revenue of ₹1261 crores for Q3 FY25, with an EBITDA of ₹133 crores, translating to a 10.5% EBITDA margin. The company's profit after tax showed a loss of ₹23 crores, which is narrowing on a year-on-year basis. For the nine months of FY25, revenue stood at ₹3892 crores, with an EBITDA of ₹378 crores and a PAT loss of ₹83 crores. Net debt was reported at ₹2195 crores, with quarterly interest costs around ₹83-84 crores.

The ONB segment recorded ₹924 crores in revenue for Q3 FY25, achieving an EBITDA of ₹119 crores and a margin of 12.9%. Management highlighted an 8% market share in the optical cable market globally (ex-China) and maintained an optical connectivity attach rate of over 20% for three consecutive quarters. The company expects global OFC demand to reach 620 million fiber kilometers by 2028, with North America and India projected to grow even faster, at almost 12% in 2025 and over 14% until 2028 for North America.

The data center and enterprise segments contributed 22% of this quarter's revenues, driven by rapid product development. The company anticipates a 22% annual growth in global data center capacity until 2030, with 70% catering to advanced AI workloads. STL is developing a comprehensive data center product suite, including high-density Celeste ribbon cables and advanced MPO panels, to tap into this market, particularly in India where data center capacity is expected to grow from one gigawatt to 2-3 gigawatts in the next few years.

The Global Services business generated ₹289 crores in revenue with an EBITDA of ₹20 crores, achieving a 6.8% margin in Q3 FY25. The company secured the strategically significant ₹2600 crore BharatNet phase three project in Jammu Kashmir, which involves a three-year execution and ten-year maintenance. Management expressed confidence in winning this project at healthy margins due to prior experience in the region, and expects formal purchase orders in the coming weeks, with work commencing in Q1 FY26.

STL Digital reported revenues of ₹77 crores in Q3 FY25 and achieved its first EBITDA positive quarter with ₹4 crores. The segment's open order book stands at ₹451 crores, supported by new global customers and a strong partnership ecosystem. The company successfully led Vedanta's digital transformation program, spanning eight companies and serving 15,000 users globally, positioning it for future large transformation opportunities.

The demerger of the Global Services business is progressing, with shareholders and creditors having approved the scheme. The demerger petition was filed with NCLT in October 2024, and final NCLT approval is expected in Q4 FY25, with listing anticipated in Q1 FY26. Management expects market recovery from 2025, driven by BEAD program investments (picking up H2 CY25, significant demand CY26) and continued telco investments, leading to improved utilization and realizations. The company aims for 70-75% capacity utilization to achieve a 20% EBITDA margin in the optical network business.

While global OFC demand saw contraction in 2024, particularly in China, management noted steady fiber deployment and client commitments. Inventory levels in North America are reducing, with 'a quarter or quarter or two left of inventory absorption.' Pricing, particularly in America and Europe, is estimated to be 20-30% down from peak levels. However, management expects realizations to improve as demand normalizes and factory utilization increases, supported by cost reduction initiatives.