Sterlite Technologies Limited — Q4 FY26 earnings call

Call held 29 Apr 2026

Management summary

Sterlite Technologies delivered a strong Q4 FY26, with significant revenue growth and margin expansion, driven by robust order book intake and strategic product launches like Neuralis and Hollow Core Fiber. The company is focused on expanding its market share in OFC and increasing connectivity attach rates, particularly in the data center segment. Despite challenges from raw material constraints and geopolitical cost pressures, management expressed confidence in continued margin expansion and growth, supported by a strong order pipeline and focus on long-term contracts.

Highlights

  • Q4 FY26 Revenue of INR 1,441 crores, up 37% YoY, demonstrating strong momentum.

  • EBITDA margins expanded to 15.1% in Q4 FY26, driven by higher utilization and better product mix.

  • Full year FY26 revenue grew to INR 4,745 crores, with EBITDA up 39% YoY to INR 628 crores, and margin improving to 13.2%.

  • PAT turned positive in Q4 and for the full year, reflecting improved profitability.

  • Open order book reached INR 7,309 crores in FY26, a 67% YoY increase, with INR 1,468 crores slated for Q1 FY27 execution.

  • Launched Neuralis, a purpose-built portfolio for AI-Era data centers, and India's first Hollow Core Fiber (HCF) cable.

Concerns

  • Raw material constraints (germanium and helium) continue to be a challenge, impacting availability and keeping costs high.

  • New near-term cost pressures from geopolitical disruption, particularly impacting helium and polymer inputs.

  • US tariff impacts, though moderating, still affect margins, with a slight impact in Q4 FY26 due to tariff reduction.

Key financials

3 periods

Headline

  • PAT
    —

Q4 FY26

  • Revenue
    ₹1,441 Cr
    YoY +37%
  • EBITDA Margin
    15.1%

FY26

  • Revenue
    ₹4,745 Cr
  • EBITDA
    ₹628 Cr
    YoY +39%
  • EBITDA Margin
    13.2%

What they filed

Q1 FY27: revenue up 87.4%, net profit up 1870.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,074 998 1,052 1,019 1,034 −4%1,257 +26%1,441 +37%1,910 +87%
EBITDA117 106 125 132 129 +10%120 +13%195 +56%385 +192%
Net profit-14 -24 -40 10 4 +129%-17 +29%59 +248%197 +1870%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Order book

high confidence

Total value

₹7,309 Cr

as of 2026-03-31 quantified

67% YoY

Execution

INR 1,468 crores are slated for execution in Q1 FY27, while the remaining order is scheduled for execution over Q2 FY27 and beyond.

The order book is well diversified with a healthy mix of order intakes from all customer segments and product categories across regions, providing strong revenue visibility.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed
    • Technology leadership and upgrading asset base for high-value data center portfolio offerings ₹500 Cr
    We do expect that in near-term we will focus on our technology leadership and upgrading our asset base to support high-value data center portfolio offerings, which can have an approximate investment of INR 500 crores.
  • Debt Net ₹1,128 Cr · 1.3× EBITDA
    Net debt stands at INR 1,128 crores with debt to equity of 0.5x and net debt to EBITDA at 1.3x, comfortably below our earlier target of 2x with a revised ambition of moving below 1.2x.

Guidance & targets

Profitability

  • EBITDA Margin Profitability · by end of current fiscal (FY27) · High confidence 20%
    our structural margin profile continues to expand in line with our guidance of 20% at reported level by end of the current fiscal.

    — Ajay Jhanjhari

Revenue

  • Enterprise and Data Center segment revenue contribution Revenue · current fiscal (FY27) · High confidence 30%

    From 19% today

    Looking ahead, with accelerating Al data center investments and pipeline visibility, we expect the Enterprise and Data Center segment to scale up to 30% of revenues in the current fiscal.

    — Ajay Jhanjhari

Debt

  • Net Debt to EBITDA Debt · High confidence below 1.2x

    Previously 2x → below 1.2x

    net debt to EBITDA at 1.3x, comfortably below our earlier target of 2x with a revised ambition of moving below 1.2x.

    — Ajay Jhanjhari

Market Growth

  • North America regional CAGR Market Growth · all the way to 2030 · High confidence 15%
    CRU expects it to deliver the strongest regional CAGR of 15% all the way to 2030.

    — Ankit Agarwal

  • India optical cable demand growth Market Growth · through 2030 · High confidence 11%
    optical cable demand projected to grow at 11% CAGR through 2030.

    — Ankit Agarwal

Capacity

  • India data center installed capacity Capacity · by 2030 · High confidence 8 gigawatts

    From 1.4 gigawatts today

    Installed capacity is set to grow to 5x from 1.4 gigawatts in 2025 to 8 gigawatts by 2030.

    — Ankit Agarwal

Market context

  • Global optical cable demand growth Market Growth · 2026 · High confidence 6.8%
    According to CRU, global optical cable demand growth for 2026 has been upgraded to about 6.8% year-on-year, following stabilization in 2025

    — Ankit Agarwal

What to watch in Q1 FY27

Raw material availability and cost trends

next quarter
Current Availability is a challenge, costs are high
Target Improvement in availability and moderation of costs

Why it matters

Directly impacts production capacity, cost of goods sold, and overall profitability.

And that is something that continues to be a challenge, but we do expect it to improve quarter-on-quarter.

Risks & concerns

  • Raw material availability and cost inflation (germanium, helium, polymer)

    medium

    Availability of germanium and helium remains a challenge, with costs remaining high; geopolitical disruptions also impacting polymer inputs.

    Management acknowledged

  • Prysmian cables litigation

    medium

    Appeal filed in September 2025, company believes it has a strong case, with potential for further appeals up to the Supreme Court.

    Management acknowledged

  • US tariff impacts on margins

    low

    Q4 FY26 saw a slight impact from tariff reductions, but Q1 FY27 is expected to see a positive impact.

    Management acknowledged

Q&A highlights

4 direct, 1 evasive
Raw material availability and cost (germanium/helium) Partial
So the costs continue to be quite high or very high. But as I said, more importantly for us is getting the availability itself. And that is something that continues to be a challenge, but we do expect it to improve quarter-on-quarter.

Highlights ongoing supply chain challenges and cost pressures for critical raw materials, which could impact future margins and production.

Asked by Aniruddha Pandhare

QIP approval and capital needs for data center investments Direct
So this has always been an enabling resolution which we take year-on-year basis. So this year also, this needs to be considered as an enabling. Right now, there are certain capex plans which we are having. We do expect that in near-term we will focus on our technology leadership and upgrading our asset base to support high-value data center portfolio offerings, which can have an approximate investment of INR 500 crores.

Clarifies the purpose of the QIP as an enabling resolution and quantifies a significant capex plan for data center portfolio, signaling strategic focus.

Asked by Aman Saifee

Hyperscaler sales, product quality, and market position Evasive
Rahil, I do not know what to say. None of these things exist, what you mentioned. We are very well placed with the data center and telco business, and I think we have grown quite a lot.

Analyst questioned potential issues with hyperscaler sales and product quality, which management strongly denied, indicating confidence in their offerings and market standing.

Asked by Rahil Dasani

US tariff impact on margins and future trajectory Direct
So the last quarter, at least in Q4, there was a slight impact only because of the reduction in tariffs because we need to sell goods in advance to our subsidiaries and all. Going forward, in Q1, there will be a positive impact on account of tariffs, while our revenue is expected to increase further from U.S. operations.

Provides clarity on the short-term impact of US tariff reductions and signals a positive margin impact in the upcoming quarter due to these changes.

Asked by Akshat Mehta

Strategy regarding spot market sales vs. long-term contracts Direct
I mean, look, I think, we have been in this business for 30 years... what you want to really make sure and go out of the way is that you are having a large portion of your business, catering to the right kind of customers who are building and co-developing with you in terms of products, and it is truly a long-term partnership. So that's the philosophy we have chosen.

Reinforces the company's strategic focus on long-term partnerships and co-development over short-term spot market opportunities, indicating a stable business model.

Asked by Akshat Mehta

Prysmian cables litigation and US tariff rebate Partial
So I think on the legal matter, we had filed our appeal in September 2025. So that's where it is, that's progressing. As I said, we continue to believe we have a very strong case. And we do hope for a favorable outcome in that matter. And I think in terms of the tariff rebate, you are right, there is a process that's got kickstarted in the U.S. for repayment of tariff to the importer on record. And to that extent, we will follow that process, but we cannot give a clear timeline right now of when and how much of those refunds will come.

Updates on two significant legal/financial matters, indicating ongoing legal process for litigation and an initiated but uncertain timeline for tariff rebates, with a potential refund of over INR 100 crores.

Asked by Saket Kapoor

Hyperscaler engagement and product testing Direct
So I think we already shared last quarter, we are actively now supplying into this market.

Confirms active supply to the hyperscaler market, indicating progress in a key strategic growth area.

Asked by Tej Patel

2 min read 5 chapters

Detailed narrative

Q4 FY26 Financial Performance Overview

Sterlite Technologies reported a strong Q4 FY26, with revenue reaching INR 1,441 crores, marking a 37% year-on-year growth. The company's EBITDA margins expanded to 15.1% in Q4, attributed to higher utilization and a favorable product mix. For the full fiscal year 2026, revenue stood at INR 4,745 crores, with EBITDA increasing by 39% year-on-year to INR 628 crores, and the full-year margin improving to 13.2%. PAT also turned positive for both the quarter and the full year, reflecting enhanced profitability and execution.

Robust Order Book and Market Position

The company's open order book demonstrated strong momentum, standing at INR 7,309 crores in FY26, a significant 67% increase from INR 4,378 crores in FY25. Order inflows for FY26 more than doubled to INR 7,687 crores, up 109% year-on-year. Of the current order book, INR 1,468 crores are scheduled for execution in Q1 FY27, with the remainder extending into Q2 FY27 and beyond. This robust pipeline provides strong revenue visibility and reinforces market confidence across diverse customer segments and product categories.

Strategic Focus on Data Centers and AI Infrastructure

STL is strategically positioned at the intersection of FTTx, data centers, and 5G investment cycles. The company launched Neuralis, a purpose-built portfolio for AI-Era data centers, and India's first Hollow Core Fiber (HCF) cable, which reduces latency by 35-40%. These innovations, along with Multi-Core Fiber technology, are designed to meet the rapidly evolving demands of hyperscalers and next-generation data centers. The company aims to scale the Enterprise and Data Center segment to contribute 30% of revenues in the current fiscal year (FY27).

Capital Allocation and Debt Management

The company maintains a disciplined approach to capital allocation. Net debt stood at INR 1,128 crores in FY26, with a net debt to EBITDA ratio of 1.3x, comfortably below the previous target of 2x and moving towards a revised ambition of below 1.2x. Management indicated an approximate investment of INR 500 crores in the near term for technology leadership and upgrading its asset base to support high-value data center portfolio offerings.

Challenges and Outlook

Despite strong performance, STL faces ongoing challenges, including high costs and availability constraints for critical raw materials like germanium and helium. New near-term cost pressures are also emerging from geopolitical disruptions impacting polymer inputs. However, management expects these constraints to ease quarter-on-quarter. The company anticipates a positive impact on margins in Q1 FY27 from moderating US tariffs and remains focused on achieving a 20% EBITDA margin by the end of the current fiscal year (FY27).

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