Financial Performance Overview
Sterlite Technologies Limited reported a significant financial turnaround in FY26 with consolidated revenue growing 19% to ₹4,745 crore from ₹3,996 crore in FY25. The company achieved a consolidated net profit of ₹56 crore, a marked improvement from the ₹72 crore loss in the previous year. EBITDA surged 39% to ₹628 crore with margins expanding to 13.23% from 11.3%. The optical networking business drove growth with ₹4,486 crore revenue (20% increase), while digital solutions showed marginal decline to ₹284 crore but improved to profitability.
Business Restructuring and Demerger
The company completed the demerger of its Global Services Business into STL Networks Limited effective March 31, 2025, with appointed date of April 1, 2023. Net assets of ₹1,164 crore were transferred to STNL, and the business results for FY2025 are presented as discontinued operations (revenue: ₹1,059 crore, PAT: ₹14 crore). Shareholders received STNL shares in proportion to their holdings, and STNL ceased to be a subsidiary post-demerger.
Operational Highlights and Innovation
STL launched several innovative products including the Neuralis AI data center connectivity suite and India's first Hollow Core Fibre cable achieving 46% faster transmission speeds with near-zero latency. The company expanded its global footprint with key orders in North America (Lugoff Manufacturing facility) and Europe (partnerships with Colt, Netomnia, Mynet). Manufacturing units in India and Italy maintained Zero Liquid Discharge and Zero Waste to Landfill certifications.
Capital Structure and Financing
The company strengthened its capital structure by issuing 45.3 million convertible warrants to promoters at ₹110 each, raising ₹125 crore with balance payable upon exercise within 18 months. Net debt reduced to ₹1,128 crore from ₹1,350 crore, with net debt-to-equity ratio improving to 0.50 from 0.68. Credit ratings stood at CRISIL AA- (Negative) for long-term instruments and CRISIL A1+ for commercial papers.
Legal and Contingent Matters
The company faces significant litigation exposure in the US where subsidiary Sterlite Technologies Inc. received an adverse verdict of $101.25 million (including attorneys' fees) in the Prysmian lawsuit. STI has filed an appeal and deposited a bond of $41.53 million. Additional legal matters include UK patent litigation with Fujikura, various tax disputes totaling ₹117 crore, and DoT AGR dues where the company obtained a stay order.
Corporate Governance and Compliance
The Board comprised 8 directors (3 whole-time, 5 non-executive) with key appointments including Rajiv Agarwal and Sathia Jeeva Krishnan as independent directors. The company adopted new Labour Codes resulting in an exceptional charge of ₹10-15 crore for statutory impacts. Auditors issued unqualified opinions but emphasized the US litigation matter as a key emphasis point.
Forward Outlook and Targets
Management expects improved performance in FY2027 targeting EBITDA margins reaching ~20% by Q4 FY2027, with data center revenue contributing 30% of total revenues. The company aims to reduce net debt-to-EBITDA ratio to less than 1.2x while continuing innovation in optical networking and AI infrastructure solutions. The 27th AGM is scheduled for August 19, 2026, with no dividend recommended for FY26 due to inadequate profits.