Demerged Sterlite Tech delivers 28% PAT growth in FY16

Demerged Sterlite Tech delivers 28% PAT growth in FY16

Pune, India
    • Post demerger, FY16 financials only for pure-play Telecom business
    • Robust performance – Revenues up 33%, EBITDA up 35%, PAT up 28% (as compared to FY15 proforma demerged Telecom business)
    • Board declares dividend of Rs 1 per share versus Rs 0.60 per share last year. Dividend payout ratio at 31% of PAT
    • Return on Capital Employed (Pre-tax) at 18% and Return on Equity (Post Tax) at 22%

Sterlite Technologies Ltd [BSE: 532374, NSE:STRTECH], India’s only Optical Communication Products, Services & Software company, today announced its financial results for the year and quarter ending March 31, 2016.

On May 24, 2016, Sterlite Tech had announced demerger effective from the appointed date of April 1, 2015. Post demerger, the FY16 performance is representative of only Telecom business. The FY15 reported numbers would not be to that effect comparable to FY16 reported financial numbers.

Business Performance (Telecom Consolidated) – FY16 Audited Vs FY 15 Proforma

Revenue 2161 1619 33%
EBIDTA 465 345 35%
EBITDA % 22% 21%
PAT 151 119 27%
All figures in Rs crore, except growth

Financial Highlights (Telecom Business Performance) – FY16 Audited Vs FY15 Proforma)

    • FY16 revenue posted strong growth of 33% compared to FY15. CAGR revenue growth of 28% for last 5 years
    • EBITDA grows by 35% on y-o-y basis. Last 5 years, EBITDA CAGR of 36%
    • PAT for FY16 was Rs 151 crore, reflecting a 27% increase as compared to FY15 PAT.
    • On Quarterly basis, standalone Q4FY16 marked the strongest quarter in the year with revenues and EBITDA increasing by 7% and 10% versus Q3FY16.
    • The ROCE (pre-tax) of the business stands at 18%, and return on equity (post-tax) at 22%

Positive quarterly and full year financial results are a testimony of the structurally solid telecom business with unique offerings across the value chain. With its end-to-end telecom offerings, Sterlite Tech is well positioned to address the large growth opportunities surfacing in India and globally for creation of next generation digital infrastructure.

Citing the growth Sterlite Tech saw during the year, Pravin Agarwal, Vice Chairman, Sterlite Technologies, said, “India is at the cusp of a data revolution. We have over 20 years of expertise in enabling digital ecosystem and are fully geared to contribute towards establishing smart networks that support India’s growth.”

Commenting on the results, Dr. Anand Agarwal, CEO, Sterlite Technologies, said, “We are happy to close the financial year with a strong operational and financial performance. Going forward, we will strengthen our focus on end-to-end telecom opportunities, while investing in building capabilities on core technologies and smart networks. We are fully committed to transforming the digital infrastructure of the country on which the next generation services and applications will be offered. We are excited by the opportunity landscape surfacing in India on network creation and global demand for optical fiber.”

Business and Operational Highlights

    • In Q4FY16, Sterlite Tech achieved an annual production run rate of 22 Mn fkm, successfully increasing optical fiber manufacturing capacity by 10% through de-bottlenecking initiatives.
    • Doubled optical fiber cable manufacturing capacity to 15 Mn fkm.
    • Sterlite Tech completed the acquisition of Elitecore Technologies, adding unique software and integration capabilities to its current offerings. Elitecore has been successfully merged and integrated.
    • Sterlite Tech was awarded its first Smart City project under Digital India for Gandhinagar to provide Smart transport solutions, IP Surveillance, Wi-Fi connectivity. Sterlite Tech has added to the momentum by winning the Jaipur Smart City project in May 2016.

Industry Recognitions

    • In 2015, Sterlite Tech was recognised amongst India’s Top 25 Innovative Industrial Companies by CII.
    • Sterlite Tech won the Frost & Sullivan India Manufacturing Excellence Award 2015.
    • Elitecore Technologies was the winner of Deloitte Technology Fast 50 Award for 2015.

Financial Reported Numbers (Standalone)

(Post demerger)
(Post demerger)
Revenue 576 540 979
EBIDTA 123 111 131
EBITDA % 21% 21% 13%
PAT 52 41 39
Q4FY16 and Q4FY15 are not comparable. All figures in Rs crore

Update on Demerger Scheme

    • The demerger of power business from Sterlite Technologies is effective from the appointed date of April 1, 2015.
    • Demerger of Sterlite Technologies Ltd (STL) will result in two independent companies i.e. Telecom Company rechristened as “Sterlite Tech” and Power Company “Sterlite Power Transmission Ltd (SPTL)”.
    • As part of approved Demerger Scheme, STL’s shareholders will retain one equity share of Rs 2 in STL (Pure play Telecom company). Additionally, for every five equity share of Rs. 2 each held in STL, the shareholders with either get one equity share of Rs. 2 each of SPTL or 1 Redeemable Preference Share (RPS) of Rs. 2 each issued at a premium of Rs 110.30 each. The RPS will be redeemable within 30 days of issue if opted for.
    • The value of STPL has been decided by the Board, based on the recommendation of two reputed Independent Valuers (Price Waterhouse & Co LLP and Haribhakti & Co LLP). The implied value per share of STPL has been arrived at Rs 22.46 per share.
    • Price Waterhouse & Co LLP has prepared the share entitlement ratio report with a fairness opinion by Axis Capital, who is acting as the financial adviser to STL.
    • Subject to receipt of certain customary regulatory approvals, the “Record Date” for the determination of the list of shareholders, who shall be entitled to receive Securities of SPTL pursuant to demerger, is expected to be scheduled in mid-June. The Company will inform the Stock Exchanges at least 7 working days in advance of the “Record date“. The eligible shareholders will then be sent an Election Notice to select any one of the options available to them under the Scheme.
    • Demerger scheme and related documents are available on www.sterlitetech.com/demerger

About Sterlite Technologies:

Sterlite Technologies Limited designs, builds and manages smarter data networks for telecoms globally. Sterlite Tech is a pure-play telecom focused business that develops & delivers optical communication products, network & system integration services and software solutions. Sterlite Tech is among the leaders in all its business areas and has operations on a global scale with manufacturing presence in India, China and Brazil. Sterlite Tech aims to transform everyday living by delivering smarter networks. Sterlite Tech is India’s only fully integrated provider of optical fibre preforms, optical fibres and cables. With a strong portfolio of over 125 patents, Sterlite Tech is home to India’s only Centre of Excellence for broadband research. Projects undertaken by the company include intrusion-proof secure network for the Armed Forces, rural broadband for BharatNet, Smart Cities’ development, and establishing high-speed Fibre-to-the-Home (FTTH) networks.

Forward-looking and cautionary statements: Certain words and statements in this release concerning Sterlite Technologies Limited and its prospects, and other statements relating to Sterlite Technologies’ expected financial position, business strategy, the future development of Sterlite Technologies’ operations and the general economy in India, are forward looking statements. Such statements involve known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements of Sterlite Technologies Limited, or industry results, to differ materially from those expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding Sterlite Technologies’ present, future business strategies, and the environment in which Sterlite Technologies Limited will operate in the future. The important factors that could cause actual results, performance or achievements to differ materially from such forward-looking statements include, among others, changes in government policies or regulations of India and, in particular, changes relating to the administration of Sterlite Technologies’ industry, and changes in general economic, business and credit conditions in India. Additional factors that could cause actual results, performance or achievements to differ materially from such forward-looking statements, many of which are not in Sterlite Technologies’ control, include, but are not limited to, those risk factors discussed in Sterlite Technologies’ various filings with the National Stock Exchange, India and the Bombay Stock Exchange, India. These filings are available at www.nseindia.com and www.bseindia.com.

A leading optical and digital solutions company.

STL is a leading global optical and digital solutions company providing advanced offerings to build 5G, Rural, FTTx, Enterprise and Data Centre networks. The company, driven by its purpose of ‘Transforming Billions of Lives by Connecting the World’, designs and manufactures in 4 continents with customers in more than 100 countries. Telecom operators, cloud companies, citizen networks, and large enterprises recognize and rely on STL for advanced capabilities in Optical Connectivity, Global Services, and Digital and Technology solutions to build ubiquitous and future-ready digital networks. STL’s business goals are driven by customer-centricity, R&D and sustainability. Championing sustainable manufacturing, the company has committed to achieve Net Zero emissions by 2030. With top talent from 30+ nationalities, STL has earned numerous ‘Great Place to Work’ awards and been voted as the ‘Best Organisation for Women’.

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