STL reports Q3 FY24 results, bullish on mid to long-term growth

MUMBAI, India, Jan. 25, 2024 /PRNewswire/ -- STL (NSE: STLTECH), a leading Optical and Digital solutions company, today announced its financial results^* for the quarter ended 31^st December 2023. The company reported INR 1,322 Cr in revenues for the quarter and an order book of INR 9,849 Cr across its three business units- Optical Networking, Global Services, and Digital. The company reported a sequential decline in revenue and EBITDA in Q3 FY24 amidst ongoing optical demand headwinds, especially in the US and parts of Europe.

In the context of the Optical Networking business, telecom and broadband providers are re-adjusting their order planning in response to macroeconomic factors like higher cost of capital, inflation, and inventory buildup resulting in temporary demand softening for optical fibre cables. Market feedback indicates a gradual recovery from Q2 FY 25 onwards. Despite weak operator spending and soft demand during the better part of the current fiscal, STL's Optical Business maintained a steady EBITDA % of 18.4% on a 9-month basis.

Taking a long-term view amidst ongoing market conditions, STL continues to aggressively drive business fundamentals of deep customer engagement, product innovation and sustainability. Engagement and sales momentum with existing and new customers, confirms customer confidence in STL's ability to provide top-quality, world-class optical and digital solutions. In this quarter, STL continued its active efforts towards developing products that solve the most compelling customer problems and recently unveiled its latest innovation in the minification of fibres - a 160-micron optical fibre. Pushing forward on its focus on decarbonising the fibre value chain, the company also launched the world's first third-party accredited eco-labelled cable products at the India Mobile Congress 2023.

STL is using this period to become more lean and agile and establish an industry-leading cost model. With a balanced approach of focusing on long-term fundamentals, strategic cost actions, geographically dispersed manufacturing units and capacities, along with a certified and field-tested portfolio of meaningful optical products, STL stands ready to deliver on the demand when the market conditions turn.

Commenting on the market developments, Ankit Agarwal, Managing Director, STL said, "Be it 5G or Generative AI, one technology trend after the other is reaffirming the strategic role of optical fibre in networks. While this downturn is temporary, the cost base and capabilities that we have built around product design, quality, manufacturing presence and sustainability will reap benefits far into the future. Regardless of the market cycle, we are as customer-centric as ever. I am confident that once the optical demand is normalised, we will hit the ground running and fast track towards becoming one of the top 3 optical players in the world."

STL's Global Services Business recorded sequential QoQ revenue and EBITDA growth, with strategic orders for fibre deployment and data centres. STL Digital, STL's newly incubated IT services business, reported a strong deal flow in the 9 months of FY24 and sequentially reduced EBITDA losses to inch closer to breaking even. At an overall company level, STL also reduced its net debt by INR 174 Cr from   FY 23 levels.

Financial highlights (INR Cr)

About STL - Sterlite Technologies Ltd: STL is a leading global optical and digital solutions company providing advanced offerings to build 5G, Rural, FTTx, Enterprise, and Data Centre networks. Read more, Contact us, stl.tech | Twitter | LinkedIn| YouTube

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