Sterlite Technologies Limited · NSE:STLTECH

Sterlite Technologies — Q2 FY24 Earnings Presentation

30 slides from Sterlite Technologies's earnings presentation, Oct 26, 2023

  1. Slide 1: Earnings Presentation Q2 FY24

    stl.tech Earnings Presentation Earnings Call Q2 FY24 26th October 2023

  2. 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

  3. Slide 3: Ankit Agarwal, Managing Director

    Ankit Agarwal Managing Director 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 Net-Zero by 2030 target, from the fr

  4. Slide 4: Strategic Priorities

    Strategic Priorities Optical deployment 1 Strategic Priorities 2 remains Steady; STL’s focus on Profitability Focus on Profitable 3 order wins in Global Services 4 Strong Growth in STL Digital 5 Robust Financials © 2023-2024 Sterlite Technologies Limited 4

  5. Slide 5: Grow, Consolidate, Build

    Strategic Priorities 01 02 03 Build Grow Consolidate Optical Networking Global Services STL Digital  Increase OFC market  Build capability for value  Consciously invest in share and Optical added services building technology and Connectivity attach rate  Demerge Services Business capability  Op

  6. Slide 6: STL's focus on Profitability

    Optical Business remains Steady STL’s focus on Profitability Optical Business 1 Strategic Priorities 2 focus on Profitability Focus on Profitable remains Steady; STL’s 3 order wins in Global Services 4 Strong Growth in STL Digital 5 Robust Financials © 2023-2024 Sterlite Technologies Limited 6

  7. Slide 7: Steady Demand in Near Term, Robust Growth for Medium to Long Term

    Steady Demand in Near Term, Robust Growth for Medium to Long Term  Near term downturn in North America on account of inventory correction  Service providers are in the process of participating OFC Demand (Mn Fkm) in various Government funded opportunities CAGR 2022- 2023- Region 2023- 2023 2024 64

  8. Slide 8: Innovation: Towards a Fully Digital and Connected World

    Carpet Coverage of Fibre 2G 3G 4G Towards a fully Digital and Connected World FTTH, IoT 10 Gbps – Innovation Video & 6G Applications 1-10 Gbps 1 Tbps Voice Email SMS 100 - 1000 Mbps Calling 2 Mbps 5G 64 Kbps 24 Kbps 4G 3G 1G 2G • FTTH • AI Data Centre • Smart Cities • Edge Data Centre • Small Cells

  9. Slide 9: Strong demand drivers for High Growth in North America

    Strong demand drivers for High Growth in North America Medium and Long Term Drivers Current Scenario Growth Forecast  North American 5G connections at 36%  Omdia forecasts 5G in North America will 5G grow 184% from 173 million currently to population penetration. reach 601 million subscriptions by

  10. Slide 10: BEAD Program to Provide Impetus from Early 2024

    BEAD Program to Provide Impetus from Early 2024, Extending Beyond 2025 2023 2024 2025 2026 onwards Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4  Federal Communication Commission(FCC) released ‘Broadband Mapping’ Demand Peak Demand Growth Runway beyond Uptick Phase Phase 2025  State-wise Allocations for the

  11. Slide 11: Strong Demand Drivers for Growth in India

    Strong Demand Drivers for Growth in India Medium and Long Term Drivers Current Scenario Growth forecast 5G  Airtel has installed 83K 5G BTS till June  5G Subscriptions are expected to grow at a and Jio has installed 193K 5G BTS. CAGR of 48% from 100 million currently to • Telcos to spend US$ 1.5 -

  12. Slide 12: Well Positioned to Execute Strategy of being Global Top 3

    Well Positioned to Execute Strategy of being ‘Global Top 3’ in Optical Networking Business Stable Global (ex-China) OFC Increasing Optical Connectivity Market share Attach rate 13% 11% 11% 10% 10% H1 CY2022 H1 CY2023 FY23 Q1 FY24 Q2 FY24 Market Share = STL Sales Volume / Total Market Demand Attach r

  13. Slide 13: Optical Business EBITDA Margins remains Stable

    Optical Business EBITDA Margins remains Stable Revenue* (INR Cr.) 2450 -10% -17% 2196 1486 1505 1313 1112 H1 FY24 Revenue at INR 2,196 Cr. 1084  OFC volumes are lower on y-o-y basis, partially offset by improved realization Q3FY23 Q4FY23 Q1FY24 Q2FY23 Q2FY24 H1FY23 H1FY24 EBITDA*(INR Cr.) H1 FY24 E

  14. Slide 14: Profitable Order Wins in Global Services

    Profitable Order Wins in Global Services Focus on 1 Strategic Priorities 2 Optical Business remains Steady; STL’s focus on profitability 3 Profitable order wins in Global 4 Strong Growth in STL Digital 5 Robust Financials Services © 2023-2024 Sterlite Technologies Limited 14

  15. Slide 15: 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 66% Completed (Large Indian telco) 31% All Projects Completed Phase - 3 30% Completed Bharatnet Project Networ

  16. Slide 16: Continue to Improve Profitability in Global Services

    Continue to Improve Profitability in Global Services Revenue* (INR Cr.) -7% -9% 781 728 413 378 375 352 353 H1 FY24 Revenue at INR 728 Cr.  Selective order intake & execution Q3FY23 Q4FY23 Q1FY24 Q2FY23 Q2FY24 H1FY23 H1FY24 H1 FY24 EBITDA at INR 49 Cr. EBITDA* (INR Cr.) 49  Favourable project mix

  17. Slide 17: Strong Growth in STL Digital

    Strong Growth in STL Digital Optical Business remains Focus on Profitable 1 Strategic Priorities 2 Steady; STL’s focus on Profitability 3 order wins in Global Services 4 Strong Growth 5 in STL Digital Robust Financials © 2023-2024 Sterlite Technologies Limited 17

  18. Slide 18: Continued Growth Momentum in STL Digital

    Continued Growth Momentum in STL Digital Identity Service Offerings  New customer acquisitions in US Industry Vertical and India across Technology & • Enterprise SaaS Services Industry verticals Services • Technology • Life Sciences & Healthcare • Strong Deal flow in Q2 FY24 • Product Engineering •

  19. Slide 19: Strong Growth in STL Digital

    Strong Growth in STL Digital Revenue* (INR Cr.) 140 78 62 35 H1 FY24 Revenue up at INR 140 Cr. 26  Revenue has seen 25% growth on q-o-q 6 9 basis Q3FY23 Q4FY23 Q1FY24 Q2FY23 Q2FY24 H1FY23 H1FY24 H1 FY24 EBITDA loss at INR 54 Cr. EBITDA*(INR Cr.)  EBITDA losses trending downwards on Q3FY23 Q4FY23 Q

  20. Slide 20: Focus on maintaining Operating Profitability & Reducing Debt

    Focus on maintaining Operating Profitability & Reducing Debt Strategic Optical Business remains Focus on Robust 1 Priorities for FY24 2 strong; STL’s focus on profitability 3 Profitable order wins in Global Services 4 Strong growth in STL Digital 5 Financials © 2023-2024 Sterlite Technologies Limite

  21. Slide 21: Tushar Shroff, Group CFO

    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

  22. Slide 22: STL Q2 FY24 Financial Highlights

    STL Q2 FY24 Financial Highlights 1883 1872 -11% 1683 -8% 1522 280 1494 251 234 235 216 13.9 14.4 13.3 14.9 15.5 Q3FY23 Q4FY23 Q1FY24 Q2FY23 Q2FY24 Q3FY23 Q4FY23 Q1FY24 Q2FY23 Q2FY24 Revenue* (INR Cr.) EBITDA % EBITDA* (INR Cr.) 82 -59% Q2 FY 24 Revenues at INR 1,494 Cr. 76 68  OFC volume down on y-

  23. Slide 23: STL H1 FY24 Financial Highlights

    STL H1 FY24 Financial Highlights INR Cr. Revenue EBITDA EBITDA % -5% +13% 3171 451 3016 401 14.9 12.6 H1FY23 H1FY24 H1FY23 H1FY24 PAT PAT % -15%  H1 FY 24 Revenues at INR 3,016 crores 87  H1 FY 24 EBITDA at INR 451 crores, increased 74 by 13 % y-o-y, along with margin expansion by 230 bps  H1 FY

  24. Slide 24: Revenue Mix has moved towards EMEA and India

    Revenue Mix has moved towards EMEA and India Customer Segments Geographical Distribution Key Order Wins Revenues* (INR Cr.) Revenues* (INR Cr.) Q2 FY24 6,925 1,522 1,494 6,925 1,522 1,494 • Multi million-dollar order from a 4% 6% 2% 1% 4% 5% 9% European telecom player for 3% 5% advanced cable soluti

  25. Slide 25: Open Order Book Highlights

    Open Order Book Highlights 10,938 10,516 8,698 Open Order Order Book Book (INR Cr.) 1,818 Spread (INR Cr.) Q1FY24 Q2FY24 Bal. 6M FY24 FY25 and beyond Open Order Book Digital & Technology Open Order Enterprises Customer wise 8% Book BU wise 23% Global Services - Capex 19% Optical Networking 49% 57% T

  26. Slide 26: Consolidated Financials: Abridged Version

    Consolidated Financials: Abridged Version P&L (INR Cr.) Q2 FY23 Q1 FY24 Q2 FY24 H1 FY23 H1 FY24 Balance Sheet (INR Cr.) FY 23 H1 FY24 Net Worth 2,095 2,136 Revenue* 1,683 1,522 1,494 3,171 3,016 (incl. minority Interest) EBITDA* 234 235 216 401 451 Net Debt 3,121 3,010 EBITDA % 13.9% 15.4% 14.4% 12.

  27. Slide 27: Global Service Demerger Status

    Global Service Demerger Status Current Structure Proposed Structure Shareholding as on March 31st,2023 Public Public Promoter Public Promoter Promoter Group Shareholders Shareholders Group Shareholders Group 45.95% 54.05% 45.95% 54.05% 45.95% 54.05%  Current Updates Optical STL STL STL Networks  R

  28. Slide 28: Summary

    Summary Grow Optical Business  Increase sales in EMEA, India and APAC markets to fill the short-term volume gap from North America market  Ramp up of US plant to capitalize on demand surge in North America in 2024/2025  Increase optical connectivity Growth and Attach Rate Consolidation towards St

  29. Slide 29: 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 241,000+ MT 16 Waste diverted from landfills (FY19 – Q2 FY24) Two of the Big Four Aligned with

  30. Slide 30: beyond tomorrow

    beyond tomorrow © 2023-2024 Sterlite Technologies Limited 30

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