Slide 1: Earnings Presentation Q1 FY25
Earnings Presentation Earnings Call Q1 FY25 30th July 2024
Slide 2: Safe Harbour
Safe Harbour Certain words and statements in this communication concerning Sterlite Technologies Limited (“the Company”) and its prospects, and other statements relating to the Company’s expected financial position, business strategy, the future development of the Company’s operations and the genera
Slide 3: Ankit Agarwal
Ankit Agarwal Managing Director and CEO-Optical Networking Business A believer in purpose-led organizations, Ankit has been leading STL’s growth journey as it transforms billions of lives by connecting the world. He holds sustainability very close to his heart and is leading the company’s ambitious
Slide 4: Strategic Priorities for FY25
Strategic Priorities for FY25 Strategic Focus on gaining market Focus on Profitable Focus on 1 Priorities for FY25 2 share in Optical business 3 order wins in Global Services 4 growth in STL Digital 5 Robust Financials © 2024-2025 Sterlite Technologies Limited 4
Slide 5: Grow Build Consolidate
Strategic priorities for FY25 01 02 Consolidate 03 Build Grow Optical Networking Global Services STL Digital • Increase OFC market share • Build capability for value • Consciously invest in and optical connectivity added services building technology and attach rate domain capability • Focus on proje
Slide 6: Transforming lives through social responsibility initiatives
Transforming lives through social responsibility initiatives RoboEdge: Empowering students with NextGen skills & focus on Robotics. Jeewan Jyoti: Empowering underprivileged women by training Covered 11+ schools and benefitted 3,500+ students them in vocational skills. Benefitted 5000+ women. Affores
Slide 7: Committed to net-zero emissions by 2030
Committed to net-zero emissions by 2030 MSCI * ESG rating at A ENVIRONMENTALLY SOCIALLY GOVERNED SUSTAINABLE RESPONSIBLE WITH CARE Eco-labelled products Committed to the UN SDGs1 Strong internal governance 250,000+ MT 16 Waste diverted from landfills (FY19 – Q1FY25) Two of the Big Four Aligned with
Slide 8: STL's focus on gaining market share
Optical Business navigating short-term softness; STL’s focus on gaining market share Focus on gaining 1 Strategic Priorities for FY25 2 business Focus on Profitable market share in Optical 3 order wins in Global Services 4 Focus on growth in STL Digital 5 Robust Financials © 2024-2025 Sterlite Techn
Slide 9: Near-term demand softness, robust growth in medium to long term
Near-term demand softness, robust growth in medium to long term 4.3% CAGR Reflections: 700 662 639 • OFC consumption for 2023 declined by 7% 612 600 577 585 553 OFC Demand (Mn Fkm) globally, led by ~12% decline in North America 536 • Inventory played a major role, suboptimal factory 500 utilization
Slide 10: AI revolution powered by fibre rich data centers & fibre led connectivity
AI revolution powered by fibre rich data centers & fibre led connectivity Data Center AI Data Center OPPORTUNITY Fibre explosion in Data centers Overall / Compute • Processor: CPU • Processor: CPU + GPU/ TPU GPU market to grow @ • Optical Connections: 1x • Optical Connections: 5x 33.3% CAGR , reachi
Slide 11: Three investments cycles coinciding
Three investments cycles coinciding Multi-year network build cycle 5G FTTx Data Centers Additionally supported by; North America • Improved telecom Subscriptions Growth 430 mn FTTx in NA in M fkm Data Center Market company tariffs in 25.76 K 260 mn 15.93 K MW Indian market 58 65 52 MW 39 39 44 • Ant
Slide 12: Robust outlook on US optical demand
Robust outlook on US optical demand North America optical cable demand, mfkm US BEAD c North America CAGR=+12.9% government • $ 42.5 Bn Program push As of July, 2024, for Broadband • 24 states completed all 10/10 of NTIA phases, advancing to 171 Infrastructure volume II 122 140 155 • 32 states compl
Slide 13: Hi-Tech manufacturing, leading innovative Next Gen products
Hi-Tech manufacturing, leading innovative Next Gen products Industry Challenges PUREST GRADE SILICON Attenuation Bend Sensitivity Compatibility Duct Space Labour Availability TCO Reduction Signal Decay Signal Leakage Legacy and Future Optimize Limited Space Workforce Constraint Technology Our Soluti
Slide 14: Market share and optical connectivity attach rate
Market share and optical connectivity attach rate Global (ex-China) OFC market share Optical connectivity attach rate 23% 8% 13% 6% H1CY23 Q1CY24 FY24 Q1 FY25 Market Share = STL Sales Volume / Total Market Demand Attach rate = Optical connectivity revenue / OFC revenue Observed OFC market share decl
Slide 15: Optical Networking Business financial highlights
Optical Networking Business financial highlights Revenue* (INR Cr.) 1,112 1,084 857 810 Q1 FY25 revenue at INR 810 Cr. 777 • OFC volume lower on y-o-y basis • Improved revenues on q-o-q basis Q2FY24 Q3FY24 Q4FY24 Q1FY24 Q1FY25 Q1 FY25 EBITDA margin at 10.9% EBITDA % EBITDA* (INR Cr.) • Reduction in
Slide 16: Well positioned to grow the Optical Business
Well positioned to grow the Optical Business 1 Local capacities: Completed capacity expansions, positioned closer to focused markets and well placed to win in the market 2 Cost structure: Continue to optimize cost structure both in terms of variable & fixed costs 3 Product development & innovation:
Slide 17: Focus on Profitable order wins in Global Services
Focus on Profitable order wins in Global Services Strategic Profitable order Focus on 1 Priorities for FY25 2 Focus on gaining market share in Optical business 3 wins in Global Services 4 growth in STL Digital 5 Robust Financials © 2024-2025 Sterlite Technologies Limited 17
Slide 18: Global Services Business financial highlights
Global Services Business financial highlights Revenue* (INR Cr.) 405 375 353 355 323 Q1 FY25 revenue at INR 355 Cr. • Selective order intake & execution leading to revenue improvement y-o-y Q2FY24 Q3FY24 Q4FY24 Q1FY24 Q1FY25 and q-o-q basis EBITDA* (INR Cr.) EBITDA % FY24 EBITDA at INR 25 Cr. 39 • M
Slide 19: Project execution on track
Project execution on track India - Public India - Private UK Transformative Modern Optical Gigabit Rural digital inclusion Network Networks Fibre roll out Fibre roll out FTTH , UK Telangana 69% Completed (Large Indian telco) 55% All Projects Completed Phase - 3 40% Completed Bharatnet Project Networ
Slide 20: Focus on growth in STL Digital
Focus on growth in STL Digital Strategic Focus on Profitable Focus on 1 Priorities for FY25 2 Focus on gaining market share in Optical business 3 order wins in Global Services 4 growth in STL Digital 5 Robust Financials © 2024-2025 Sterlite Technologies Limited 20
Slide 21: Continued growth momentum in STL Digital
Continued growth momentum in STL Digital Identity Service offerings Industry vertical • Enterprise saas • Technology services • Life sciences & healthcare ▪ Robust deal flow, new customer • Product engineering • Manufacturing acquisitions in US and India across • Delivery centre in • Cloud & cyber B
Slide 22: Digital business financial highlights
Digital business financial highlights Revenue* (INR Cr.) 78 80 78 71 62 Q1 FY25 Revenue at INR 71 Cr. Q2FY24 Q3FY24 Q4FY24 Q1FY24 Q1FY25 • Revenue growth continued on y-o-y basis EBITDA*(INR Cr.) Q1 FY25 EBITDA loss at INR 17 Cr. Q2FY24 Q3FY24 Q4FY24 Q1FY24 Q1FY25 • EBITDA losses trending downwards
Slide 23: Tushar Shroff
Tushar Shroff Group CFO Tushar has a rich experience of nearly three decades and is highly focused on building resilient and value-creating organizations. Tushar has deep expertise in the areas of fundraising, capital structuring, merger & acquisition, treasury management, taxation, financial accoun
Slide 24: Focus on maintaining operating profitability & reducing debt
Focus on maintaining operating profitability & reducing debt Strategic Robust 1 Priorities for FY25 2 Focus on gaining market share in Optical business 3 Profitable order wins in Global Services 4 Focus on growth in STL Digital 5 Financials © 2024-2025 Sterlite Technologies Limited 24
Slide 25: STL financial highlights
STL financial highlights 1,494 1,522 1,322 235 1,140 1,218 216 109 15.4 93 14.4 67 8.2 5.9 7.6 Q2FY24 Q3FY24 Q4FY24 Q1FY24 Q1FY25 Q2FY24 Q3FY24 Q4FY24 Q1FY24 Q1FY25 Revenue* (INR Cr.) EBITDA % EBITDA* (INR Cr.) Q1 FY25 Revenue at INR 1,218 Cr 46 • OFC volumes lower on y-o-y basis 28 • Improved reven
Slide 26: Diversified revenue mix
Diversified revenue mix Customer segment split Geographical distribution Large order wins in Revenues* (INR Cr.) Revenues* (INR Cr.) Q1 FY25 5,478 1,218 5,478 1,218 • Long term large orders from 2% 1% 15% leading UK telecom operator for 3% 29% optical interconnect 35% 44% • Leading telecom companies
Slide 27: Order Book Highlights
Order Book Highlights Open order book (INR Cr.) Order book spread (INR Cr.) 10,290 9,883 8,698 1,184 Q4 FY24 Q1FY25 Q2 FY 25 Q3 FY25 and beyond Customer wise open order book Open order book BU wise Enterprises Digital & Technology 15% 4% Global Services - Capex 20% Citizen networks 25% 60% 50% Optic
Slide 28: Consolidated financials: abridged version
Consolidated financials: abridged version P&L (INR Cr.) Q4 FY24 Q1 FY24 Q1 FY25 Revenue* 1,140 1,522 1,218 EBITDA* 67 235 93 EBITDA % 5.9% 15.4% 7.6% Key Updates Depreciation 85 81 82 • Net Debt has reduced by EBIT* -18 154 11 INR 769 Cr from FY24 Finance costs 88 92 71 • Debt to Equity ratio PBT* -
Slide 29: Global Services demerger status
Global Services demerger status Completed – May 2023 Completed –Sept 2023 Approx. 3 months Board / Audit Committee Stock Exchange Filings NCLT Filings and Listing of Resulting Co Approval for Demerger and receipt of In-principle Approvals (Post receipt of NCLT Approvals (In Progress) Order) • Scheme
Slide 30: Summary focus areas
Summary focus areas • Drive technology and cost leadership to be in ‘Global Top 3’ • Increase sales in focused markets to fill the short-term volume gap Optical Business • Increase optical connectivity growth and attach rate • Rapidly building data center product portfolio • Continued focus on selec
Slide 31: Lets answer your queries!
Lets answer your queries! © 2024-2025 Sterlite Technologies Limited 31
Slide 32: beyond tomorrow
beyond tomorrow © 2024-2025 Sterlite Technologies Limited 32