Sterlite Tech.

Sterlite Technologies reported consolidated Q4 FY24 revenue of ₹1,140 crores and full year FY24 revenue of ₹5,478 crores, reflecting a challenging market environment. Consolidated EBITDA for Q4 stood at ₹67 crores, with the full year at ₹627 crores. The company recorded after-tax losses of ₹83 crores in Q4 FY24 and ₹58 crores for the full year, primarily due to lower optical fiber cable sales volumes.

The optical networking business saw Q4 FY24 revenue of ₹777 crores and full year revenue of ₹3,830 crores, impacted by lower volumes, particularly in the US and Europe. Q4 EBITDA was ₹60 crores (7.7% margin), while full year EBITDA was ₹621 crores (16.2% margin). Management noted sub-50% utilization levels in Q4 and expects market normalization in 1-2 quarters as inventory digestion continues, with a target utilization of 60-65% for profitability.

The Global Services business achieved Q4 FY24 revenue of ₹323 crores and full year revenue of ₹1,456 crores. EBITDA margins significantly improved year-on-year from 3.1% to 7.6% for the full year, reaching 12.1% in Q4, driven by a favorable project mix. STL Digital quadrupled its revenues year-on-year to ₹298 crores for FY24, with Q4 revenue at ₹78 crores, though it reported an EBITDA loss of ₹83 crores for the full year.

Sterlite Tech. focused on strategic priorities including increasing optical connectivity market share, cost optimization, and scaling digital services. The company successfully reduced net debt by ₹334 crores during FY24 through internal accruals. Additionally, a ₹1,000 crore QIP fundraise was completed in April 2024, onboarding marquee institutional investors to strengthen its balance sheet and support future growth initiatives, which is expected to reduce interest costs for the current year.

Despite a 7.1% global decline in OFC consumption in 2023, CRU projects a healthy 4.4% annual growth rate from 2023 to 2028, reaching 666 million fiber kilometers by 2028 (8% excluding China). Key demand drivers include 5G network creation, FTTH deployments (100 million homes awaiting FTTH in the US), and new-age data center buildouts, with AI data centers potentially requiring 5-8x higher fiber demand. The BEAD project in the US is expected to generate initial demand in Q3/Q4 FY25, with meaningful demand in calendar year FY25.

The company is progressing with the demerger of its services business, with the first NCLT hearing conducted in April 2024, and is working on next steps for shareholder and creditor approval. On the ESG front, Sterlite Tech. diverted over 245,000 metric tons of waste from landfills and reduced 30,000 tons of CO2 equivalent emissions since FY19. It also recycled 830,000 cubic meters of water and remains committed to becoming a carbon-neutral company by 2030.