Fibre-optic cables feed into a server inside a comms room at an office in London, U.K. (Photographer: Chris Ratcliffe/Bloomberg)  

Q3 Results: Sterlite Tech’s Margin Declines In Otherwise Strong Quarter

Sterlite Technologies Ltd.’s margin declined in the three months through December, despite posting revenue and profit growth.

The telecom gear manufacturer’s margin contracted from 24 percent to 22 percent year-on-year.

Margins at Ebitda level are in line with Sterlite’s growth trajectory and business model, said its Chief Financial Officer Anupam Jindal.

“Our margin at the company level is the mix of product business, which is the high margin business, and services business—which is relatively low margin but high return-on-capital business,” Jindal said in an interaction with BloombergQuint.

He said the services segment contributed over 30 percent to the company’s revenue in the reported quarter, up from 24-25 percent in the previous year.

Jindal shrugged off concerns about the falling fibre prices and said he is confident they’ll stabilise soon. He said Sterlite is well-positioned with long-term contracts to deal with minor shifts in pricing.

Earnings Highlights (YoY):

  • Revenue surged 60 percent to Rs 1,335 crore.
  • Net profit jumped 61.6 percent to Rs 145.6 crore.
  • Ebitda rose 46 percent to Rs 294 crore.

Also read: Sterlite Tech Aims For Headstart In 5G Race With Capex Plans Push

Watch the full interview here: