This Smallcap data center company, which offers global optical and digital solutions company and provides advanced offerings to build 5G, FTTx, Rural, Enterprise, and Data Centre networks was up 2.8 percent after announcing the certification of Build America Buy America-compliant optical products.
Price Movement
In Tuesday’s trading session, Sterlite Technologies Limited stock was up by 2.8 percent in the day’s trade after announcing the certification of Build America Buy America-compliant optical products. The stock has delivered a negative return of around 28 percent in the past year underperforming the Nifty Index in the same period. The stock reiterated from the day’s high of Rs. 106.35 and was trading at Rs. 106.30 which is 2.75 percent from the previous closing price of Rs. 103.45 per share.
What happened
The company’s stock rose after Sterlite Technologies Inc, a U.S. subsidiary announced self-certification of the optical fiber cable products that meet the U.S. government’s Build America Buy America (BABA) requirements. This voluntary self-certification strengthens STI’s position as a key supplier for federally-funded broadband infrastructure projects under the Broadband Equity, Access, and Deployment (BEAD) Program
This regulation are used domestically and for the use of materials and products for BEAD and other funded infrastructure programs by the federal government. The Investment of $56 million for the new manufacturing plant in Lugoff, South Carolina, to meet the growing demand for broadband solutions. The facility produces advanced fiber optic cables, optical connectivity products, and private broadband projects including products under the BEAD Program.
Management Commentary
Rahul Puri, CEO of STL Optical Networking Business said “Our inclusion in the NTIA’s Self-Certification list underscores our dedication to American manufacturing. It ensures our customers that our optical fiber products meet strict BABA requirements and are ready to drive the next wave of broadband infrastructure projects. We’re proud to play a key role in the BEAD Program, enhancing connectivity and bridging the digital divide across rural and underserved areas.”
Financial Performance
Their Q2FY25 results show revenue from operations of Rs. 1,413 crore which decreased by 5.42 percent year on year, from Rs. 1,494 crore in Q2FY24 and a 16 percent increase from Rs. 1,218 crore in Q1FY25. The company had a net loss of Rs. 14 crore in Q2FY25, compared to a net profit of Rs. 32 crore in Q2FY24. However, on a quarter-on-quarter basis, the losses have declined from a net loss of Rs. 48 crore.
The debt-to-equity ratio was 1.75 times declined from 1.81 times in FY23. The RoE in FY24 stood at -3.94 percent declining from 6.32 percent a year ago. However, the RoCE stood at 4.77 percent which has declined from 10.96 percent in FY23.
Revenue Segment
According to the company’s quarterly September 2024 report, they considered revenue from the optical networking business which contributed around 70.97 percent, the Global service business – 24.60 percent, and the remaining 4.42 percent from the Digital and technology segment as of Q2FY25.
Shareholding Pattern
As of December 2024, the shareholding pattern includes promoters holding a major share of 44.17 percent stake in Sterlite Technologies, Foreign Institutional Investors (FII) holding around 8.71 percent, Domestic Institutional investors (DII) standing at 9.42 percent, and public holdings standing at 37.70 percent.
About the company
Sterlite Technologies Limited is a global provider of optical and digital solutions and specializes in end-to-end data network infrastructure. The company designs and manufactures high-capacity fiber cables, optical connectivity solutions, and software-defined networks for the telecom and power sectors.
STL partners with telecom operators, cloud providers, and enterprises to improve connectivity through technologies like 5G and Fiber-to-the-Home (FTTH). With operations in India, China, and Brazil, STL aims to facilitate digital transformation globally. The company’s order book as of Q2FY25 stood at Rs. 8,630 crore out of which 60 percent is from telcos, 27 percent from citizen networks, and the remaining 13 percent from enterprises.
Written by Santhosh S
