1. At a Glance
Sterlite Tech posted a Q1 FY26 revenue of ₹1,019 Cr and a miraculous ₹10 Cr net profit — which is a win when your past three quarters looked like a tax write-off. Optical fibre may be thin, but STL’s margin of safety is thinner.
2. Introduction with Hook
Imagine a sprinter who forgets they’re in a marathon halfway through the race. That’s Sterlite Technologies — once hyped as India’s 5G infra enabler, now moonlighting as BSNL’s subcontractor and struggling to remember if it’s a product company, project company, or a PowerPoint company.
Two metrics to set the mood:
- ROE: –3.6%
- FY25 Net Profit: –₹123 Cr (yep, redder than your Diwali lehenga)
3. Business Model – WTF Do They Even Do?
Here’s the menu of STL:
- Optical Fibre & Cables: The bread and butter. They’re one of the largest producers globally (outside China).
- System Integration Projects (like BharatNet): Basically laying cables for state-run projects at wafer-thin margins.
- STL Digital: The buzzwordy part that no one understands but gets mentioned a lot on investor calls.
- FTTH, Quantum Comm, Green Hydrogen Collabs: If it’s trending, STL has a press release about it.
Basically, they dig ditches, fill them with glass, and occasionally pitch AI and green hydrogen for vibes.
4. Financials Overview – ₹ Cr
| Metric | Q1 FY25 | Q1 FY26 | YoY Change |
|---|---|---|---|
| Revenue | 872 | 1,019 | +17% |
| EBITDA | 64 | 132 | +106% |
| Net Profit | –48 | 10 | Let’s pretend this is a win |
| OPM | 7% | 13% | Up, but still meh |
Sales are up. Profits exist again. But this still feels like the startup cousin of a PSU contractor.
5. Valuation – What’s This Worth?
Let’s attempt to price this “telecom infra renaissance artist”:
- P/E Method: TTM EPS = –₹1.40. So, um… P/E = undefined.
- EV/EBITDA Method: ₹509 Cr TTM EBITDA × 8x = ₹4,072 Cr
– Net Debt = ~₹1,800 Cr → Equity Value = ₹2,272 Cr → FV = ₹46/share
Fair Value Range: ₹45–₹60
CMP = ₹117
So unless you’re investing based on hope, memes, or BharatNet orders, this is not cheap.
6. What’s Cooking – News, Triggers, Drama
- ₹2,631 Cr BSNL BharatNet Order (June 2025): 10x quarterly sales but backend-loaded
- Green Hydrogen Plant Partnership: Because fibre cables and hydrogen are besties now?
- Quantum-Secured Fibre Demo: Sounds cool, sells nothing (yet)
- Tech Data tie-up for Data Center Products: AI buzzword = check
- CFO & CEO Resignations (Mar & Jan 2025): Red flags disguised as “strategic shifts”
More press releases than paying clients? Check.
7. Balance Sheet – Strap in
| Item | FY25 (₹ Cr) |
|---|---|
| Equity | 98 |
| Reserves | 1,892 |
| Borrowings | 1,926 |
| Total Liabilities | 5,527 |
| Fixed Assets | 2,928 |
| Other Assets | 2,486 |
Debt’s come down from ₹3,376 Cr (FY24) to ₹1,926 Cr, so yay. But they’ve basically shrunk the balance sheet like it’s laundry on a hot wash.
8. Cash Flow – So Busy, Yet So Broke
| Year | CFO | CFI | CFF | Net |
|---|---|---|---|---|
| FY23 | ₹228 Cr | –₹56 Cr | –₹132 Cr | ₹40 Cr |
| FY24 | ₹791 Cr | –₹211 Cr | –₹691 Cr | –₹111 Cr |
| FY25 | ₹348 Cr | –₹89 Cr | ₹4 Cr | ₹263 Cr |
After a cash drought in FY24, STL is finally breathing again. But not enough to dance. Maybe just a light clap.
9. Ratios – Sexy or Stressy?
| Ratio | FY25 |
|---|---|
| ROCE | 3% |
| ROE | –3.59% |
| PAT Margin | –1.28% |
| Debt-to-Equity | ~1.01 |
| Interest Coverage | ~1.1x |
With a ROE below zero and margins thinner than a YouTube ad skip button, STL’s financials are better described as “work-in-regress.”
10. P&L Breakdown – Show Me the Sadness
| Year | Revenue | EBITDA | PAT |
|---|---|---|---|
| FY23 | ₹6,925 Cr | ₹895 Cr | ₹127 Cr |
| FY24 | ₹5,478 Cr | ₹570 Cr | –₹57 Cr |
| FY25 | ₹3,996 Cr | ₹416 Cr | –₹123 Cr |
If this were a movie, it started as a thriller and turned into a tragic comedy by FY25. Revenue halved in 2 years — no explanation, just pain.
11. Peer Comparison – Discount Sale or Damaged Goods?
| Company | CMP (₹) | Sales (TTM Cr) | PAT (Cr) | ROE | P/E |
|---|---|---|---|---|---|
| Tejas Networks | 601 | 7,562 | ₹175 | 12.8% | 60x |
| ITI Ltd | 303 | 3,616 | –₹268 | –16% | NA |
| Sterlite Tech | 117 | 4,483 | –₹68 | –3.6% | NA |
| Optiemus Infra | 574 | 1,890 | ₹63 | 11.6% | 79x |
STL is like the kid who copied the answers but still flunked the exam. Tejas at least sells optimism. STL sells fibre… and apologies.
12. Miscellaneous – Shareholding, Management Meltdowns
| Category | Jun 2025 |
|---|---|
| Promoters | 44.41% |
| FIIs | 6.74% |
| DIIs | 11.33% |
| Public | 37.52% |
Promoter holding has fallen from 54% to 44% in 2 years. CEO and CFO both resigned within months. Investors are left wondering if the company’s core business is telecom, or turnover.
New appointments pending. Trust? Also pending.
13. EduInvesting Verdict™
Sterlite Tech wants to be the backbone of India’s digital future — but right now, it feels more like a slipped disc. BharatNet may offer steroid injections, but execution, margin discipline, and stability are still on vacation.
Decent potential. But don’t try running with this until it finishes rehab.
Written by EduInvesting Team | 25 July 2025
Tags: Sterlite Technologies, Telecom Infra, BharatNet, BSNL, Optical Fibre, EduInvesting Premium
