STL has announced its financial results for the quarter ended (QE) December 31, 2023. The company reported Rs 13.22 billion in revenues for the quarter and an order book of Rs 99.49 billion across its three business units – optical networking, global services, and digital. The company reported a sequential decline in revenue and earnings before interest, taxes, depreciation, and amortisation (EBITDA) in the third quarter (Q3) of the fiscal year 2023-24 (FY24) amidst ongoing optical demand headwinds, especially in the US and parts of Europe.
In its 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 indicated a gradual recovery from Q2 FY25 onwards. Despite weak operator spending and soft demand during the better part of the current fiscal, STL’s optical business maintained a steady EBITDA per cent of 18.4 per cent on a nine-month basis.
In this quarter, STL continued its active efforts towards developing products that solve the most compelling customer problems and also 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.
For its global services business, STL recorded sequential quarter-on-quarter (QoQ) revenue and EBITDA growth, with strategic orders for fibre deployment and data centres. As for its digital business, STL’s newly incubated IT services business reported a strong deal flow in the nine 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 Rs 1.74 billion from FY23 levels.
Commenting on the results, Ankit Agarwal, managing director, STL, said, “Be it 5G or generative AI (GenAI), 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 three optical players in the world.”
