Sterlite Technologies Q3 FY26 Earnings: Growth, Innovation, and Tariff Challenges

Ladies and gentlemen, good day and welcome to Sterlite Technologies Limited Q3 FY26 earnings conference call. Before

we proceed with the call, let me remind you that the discussion may contain forward-looking statement that may

involve known or unknown risks, uncertainties, and other factor. It must be viewed in conjunction with our

business risks that could cause future results performance or achievement to differ significantly from what is

expressed or implied in such forward-looking statements. Please note that we have uploaded the results and

earnings call presentation on STL's website and the same is available on the exchange. In case you have not received

the same, you can write to us and we'll be happy to send you the same to you. to take us through the results and answer

your questions. Today we have the senior management of Sterite Technologies Limited represented by Mr. Ankit Agraal

the managing director and Mr. Ady Janari chief financial officer. We will start the call with brief overview of the

quarter gone past and then conduct the Q&A session. As a reminder, all participants line will be in listenonly

mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need

assistance during this conference call, please signal an operator by pressing star then zero on your touchstone phone,

please note that this conference is being recorded. I will now hand over the call to Mr. Ankit. Over to you, sir.

>> Thank you. Good day everyone. Thank you for joining STL's quarter3 FI26 earnings call. I begin by walking you through the

key highlights from my investor presentation after which AJ our CFO will take you through the financials.

STL is a global leader in digital connectivity infrastructure serving telecom operators, data centers, citizen

networks as well as large enterprises. We operate through two business divisions. optical networking business

which gives us end to-end play in optical fiber, fiber cable, specialtity cables as well as connectivity. Our

digital and technology solutions adds cloud cyber security, enterprise SAS, AI and product engineering. We are number

one in India as an end-to-end optical manufacturer with almost 8% optical fiber cable market share outside of

China. With 30 plus years of leadership, more than 780 patents and 10 plus zerowaste manufacturing facilities

worldwide, STL is leading the next wave of global digital infrastructure. At STL, we are one amongst very few

companies in the world who have mastered the journey from glass to gigabit. It starts with the purest grade of silicon

which we transform through advanced processes like silicon tetrachloride formation, chemical vapor deposition and

high precision cining to create ultra pure glass preforms which are the backbone of optical fiber. From there we

draw the highest grade optical fiber, design highdensity cables and develop reliable connectivity products that

power data centers and telecom networks around the world. This full stack integration right from raw material and

network deployment gives STL a unique edge in quality, cost efficiency and innovation across the connectivity value

chain. This deep integration enables us to engineer next generation fiber cable and connectivity solutions that are

redefining global connectivity. Our end-to-end innovation from material science to smart optical systems help

global network builders create faster, denser, and more reliable networks in the era in the AI era.

As we complete 9 months FI26, our strategic direction in optical networking remains unchanged. We

continue to focus on gaining market share in optical fiber cables, improving connectivity attach rates and expanding

our data center portfolio to meet the growing demand from AIEL infrastructure. At the same time, we are strengthening

our technology and cost leadership in the optical domain. Beyond growth, our mission is to build for the future

through STL digital. We are investing in technology and domain capabilities to create long-term differentiation while

ensuring all initiatives deliver profitable and sustainable growth. These priorities will guide us through the

rest of FI26 and beyond, enabling us to not only meet today's needs, but to shape

the digital networks of tomorrow. Moving on, we will now speak about our performance in the optical networking

business and our focused journey towards gaining our market share. We're at the intersection of three

powerful multi-year investment cycles, FTX, data centers, and 5G, creating a strong structural tailwind of optical

infrastructure. FTDX is accelerating globally with deployments rising from 151 million fiber kilometers to 170

million fiber kilmters by 2030. In the US alone, over 100 million homes will be served by fiber by 2030, supported by

large government programs like bead and batnet in India. Data centers are the fastest growing

driver of fiber demand. CRU projects global DCled demand to grow at 76% CGR from 2025 with hyperscaler driving long

haul and inter data center connectivity. Global DC capex is expected to approach almost 600 billion by 2027.

5G is also scaling rapidly with 6.3 billion subscriptions expected by 2030 carrying 80% of all mobile data traffic.

This requires a massive amount of fiber black hole, front hall, and network densification. Together, these three

cycles are creating a structural multi-year demand tailwind for fiber and connectivity, positioning STL at the

center of the next global digital infrastructure buildout. Next, we show you how global telecom

technology leaders like AT&T, Unity, VT and many others are aligned in back in backing optical fiber as the base of the

digital future across 5G broadband data centers and AI infrastructure. The takeaway is simple. Fiber remains the

backbone of all digital infrastructure. Moving on, slide 11 shows how the AI revolution and the rapid data expansion

are creating once in a generation opportunity for glo optical connectivity. Data center capacity is

expected to grow sharply over the decade with significant share of new demand coming from AI infrastructure.

Hyperscalers are stepping up investments pushing global data center IT spending towards multi- trillion dollar levels.

AI data centers are fundamentally different as they are far more fiber intensive. GPU dense racks need almost

up to 36 times more fiber than traditional CPU setups and overall fiber density is almost 70% higher. This is

driving a strong surge in fiber demand within the data centers. At the same time, data centers are increasingly

being connected to each other which accelerating growth in data centers interconnect market. This segment is

expected to more than double by 2030 adding another large source of fiber demand globally. We are well positioned

for this shift. Our year our end to end make in India for the world AIDC portfolios built for the GPU dense high

bandwidth low latency environment. Our enterprise and data center business is gaining traction with 20% revenue

contribution in year-to- date FI26 and we remain on track to scale this to 30%. and expected to be a growth a key growth

driver in the medium term. According to CRU, global optical cable demand growth for 2025 has been upgraded to about 4%

yearonear, reflecting strong visibility led by many mainly by North American data center buildout and improving

execution in China. Importantly, demand is now consistently outpacing domestic supply in North America, keeping the

lead times tight. Looking ahead, North America is set to be the main growth engine powered by AILE data centers, DCI

builds and continued FTX expansion. CRU expects it to deliver the strongest regional growth of 13.7% CAGGR through

2013. APAC excluding China as a second major growth pillar growing at almost 6% CAGGR

led by India and Southeast Asia. This is supported by projects like Harnet, higher telco capex and rising data

center investments. Overall, this points to a sustained micro multi-year upcycle in fiber demand with North America and

APAC exchina both core STL focused markets going forward. We're also seeing positive momentum in India, Southeast

Asia, and parts of Europe, which also aligned with our strategy. Our order intake clearly shows how STL

is capitalizing on the market recovery. Year-to- date FI26, we have recorded 4,263

crores in orders, a strong 40.3% growth over last year. This reflects both improved demand and our ability to win

at scale. The momentum is driven by three main factors. First, large scale data center connectivity wins aligned

with global infrastructure buildouts. Second, a breakthrough into tier one North American telecom customers

strengthening our presence in critical market. and third welldeserved diversified order book balancing capex

late bills with long-term service contracts. Overall, this performance reinforces our strategic positioning and

gives us strong visibility and confidence as we move forward. Let me briefly highlight STL is

tendering its innovation leadership this quarter. We advanced next generation optical technologies. IOU with Q new

labs a deep tech cyber security firm position us with quantum secure communications while while successful

multi-core trials with cold a premier digital infrastructure company in London in the United Kingdom validated our

readiness for real world deployment our products we continue to scale across fiber connectivity and copper we

expanded our IBR intermittent bonded ribbon portfolio to 1728 fibers and 30 3,456 6 fibers for data centers,

enhanced data center micro cables, launched a nano DC portfolio as well as opto fit connectivity solutions. In

addition, we also secured railway signaling approvals in copper for supporting our diversification.

I innovation is backed by a strong IP engine with 780 patents including 23 new filings in the last quarter.

We're also building future capabilities through holo core fiber for ultra low latency and AI enabled fiber sensing

which is seeing grow gl growing growing commercial adoption. STL won four major awards in 2025 across data center

innovation leadership cabling and social impact. We we are we are delivering global first India's first quantum

secured networks green hydrogen projects the world's slimmest 160 micron fiber showing HL leadership in high

performance and sustainable solutions overall this reflects our focused approach in deep tech innovation IPLE

differentiation and long-term value creation slide 15 of the presentation showcases

our strengthened data center portfolio the launch of the world's slimmest 864 fibers in a ribbon cable. We now offer

full stack DC connectivity suite, fiber and optical fiber and copper cabling, pre-terminate systems and highdensity

IBR designed for faster deployment, low latency and scalability. The portfolio is AI and hypers scale

ready meeting global standards and sustainability requirements. It is supported by in-house future ready

manufacturing and strong go-to partnership. Site 16 highlights leadership in

multi-core fiber, a key enabler in quantum safe multi-terab networks. Multi-core fibers allow four to seven

times higher capacity with the same physical footprint, improving space efficiency by lowering deployment

infrastructure cost making it ideal for AI data centers, longhaul 5G and high performance interconnects. We have shown

cap strong capability enabling India's first quantum key distribution over multiore fiber completing live 100 km

testing and becoming the first globally to deploy multi-core fiber in both aerial and underground networks further

validating our successful trials with cold in the UK. Overall this position is still at the forefront of quantum safe

next generation optical networks with strong relevance for global hyperscalers and carriers.

Looking ahead to SGL's next generation fiber portfolio, excite we have two exciting launches coming up. G654E and

holo core fiber. To start with, G654E delivers around 30% lower signal loss along with a larger core. This makes it

ideal for ALED high power longd distance networks such as 400 g 100 gig data center links, national backbones and

subc cables. At the same time, holocore fiber is truly a gamecher because the light travels through airfield core. It

offers 30 to 47% lower latency and it supports extremely high bandwidth. As a result, it opens up major opportunities

in data center interconnect, sensing and quantum communications. Put together these launches will place STL among a

select group of very few global players ready for large scale G650 deployment and early leadership in holo core fiber.

exactly where the future of past low latency networks are headed. Speaking of our market position and

attached rate trends, our global exchina OFC market share remains stable at 8% year-to- date FI26

reflecting disciplined execution in a competitive market with clear focus on gaining our share over time through our

technologies. Our optical connectivity attach rates moderated to 17% in year-to- date FI26 from 22% in FI25.

This was primary driven by product mix and project timing along with a sharp acceleration revenues leading to a

higher base. We view this moderation as temporary and importantly the long-term opportunity of connectivity remains

strong. Our portfolio is expanding and we're increasingly focused on selling our integrated solutions of the cable

and connectivity rather than standalone products. Taken together, this shows that our core OFC business is stable

while there's a clear runway to drive higher value through attached lead growth over the medium-term.

Now turning on to the financial performance of optical networking business. In quarter 3 FI26, the

revenues came at 1,174 crores, reflecting a strong volume recovery and growth Q on Q and BY basis. For a Y to

date FI26 revenues increased to 3,115 crores, indicating sustained momentum on profitability. Quarter 3 FI26 EBIDA

margin was 11.2% moderating versus earlier quarters due to tariff related headwinds. However, EBIDA in absolute

terms grew with Y today year-to- date FI26 EBIDA at 44 crores supporting margin recovery as volume scale and the

cost normalized. Overall, this reflects improving topline traction and clear path to margin recovery as operating

leverage kicks in. Let me now take you through a continued growth momentum in STL digital.

We have global disco uh delivery footprints across India, US and UK with strong capabilities in data analytics,

AI cloud, cyber security and enterprise SAS serving diversified industry verticles. During Q3, we added one new

major customer taking our total base to 34 and secured US dollar multi-million SAP SAP for Hannah deal with US-based

healthcare major demonstrating execution capability in large complex programs. Our team now comprised of 1,120

consultants supporting growth deal sizes and multi-ervice engagements. Financially, we close the quarter of an

open order book of 276 crores providing strong revenue visibility. Overall, SCL digital is well well positioned for

scalable growth driven by customer centricity, innovation and increased deal depth.

Moving to the next slide, we showcase steady progress in digital business both on scale and profitability. Quarter 3

FI26 revenue was 86 crores with stable performance over the 9 months at 215 crores. Broadly in line with the last

year despite a tough environment. More importantly, quarter 3 FI26 EIDA was 1 cring another conservative IBIDA

positive quarter reflects operating discipline and better project quality. While still in the scale up phase, the

business is clearly moving in the right direction while stabilizing revenues and improving profitability.

Now I will hand over the call to AJ to take you through the financials. Uh thank you Anit and thanks to everyone

for joining us today. I'll take you through the key financial highlights for Q3 and YTD FI26. Our revenue for Q3

stood at INR 1,257 cr reflecting strong growth momentum with YTD FI26 revenue up 12% yearonear at INR 3311 cr was

broad-based across business segments. A bit for quarter 3 was INR 129 cr with a margin of 10.3%.

Margins moderated in the near term due to tariff headwinds. For YCD, FI26 AIA grew 35% yearonear to INR 410 cr with

margins improving to 12.4% yearonear pad before exceptional items stood at 9 cr in uh the current fiscal compared to

a loss of 78 cr last year. A clear turnout which highlights strengthening underlying profitability of the

business. The exceptional item for the quarter includes a one-time impact of rupees 15 cr related to the new labor

code. Overall, the business continues to scale with improving earning quality. Operational IITA has improved for five

consecutive quarters rising from 11.2% in Q2 of FI25 to 17.9% in Q3 of FI26. driven by a richer product mix and a

higher contribution from the US market. However, the US tariff reset effective midc quarter 2 of FI26 created a

temporary headwind reducing reported IITA by almost uh 760 bips in quarter 3 of the current fiscal and bringing the

reported margins to 10.3%. While underlying margin momentum remains strong, we have proactively started

implementing some mitigations measures such as passing on some proportion of tariff cost to customers and

aggressively ramping up local production in the US facility. We still remain hopeful of early resolution of the India

US bilateral trade agreement which will provide a clear path for further margin expansion.

From a geographic standpoint, our revenue mix continues to diversify. North America share increased from 25%

in financial year 25 to 36% in the current financial year. While Europe remains a significant contributor at

40%. This balanced regional footprint reduces concentration risk and position as well to capture growth across key

global markets. Moving to the order book, we have seen continued momentum this quarter. Our

open order book stood at 5,325 cr up from 5,188 cr in Q2 FI26 reflecting healthy order inflows and

strong market confidence. Of this 988 cr is slated for execution in the next quarter while the remaining 4,00 337 cr

is scheduled for execution over fi27 and beyond. This robust order pipeline provides strong revenue visibility and

reinforces our growth outlook for the year. On slide 30, we have shared an upris

snapshot of our reported numbers for your reference. Net debt stands at 1,331 crores with debt to equity ratio of87

and net debt to IITA at 2.58 lakhs. With this now I hand it over back to Ankis for updates on our social responsibility

initiatives and closing remarks. Thank you AJ Slrs insurance continue to create a strong and measurable impact across

healthcare education. Our flagship healthcare program, Swasty Suraka won the best rural healthcare initiative of

the year 2025 at the India social impact awards recognizing a sustained contribution to rural and tribal

healthcare. In education, the Robo Edge program received the best education support initiative of the year 2025 at

the Indian CSR awards for advancing STEM learning and innovation. Robo Edge students are ex also excelled globally

in international rootex championship 2025 winning multiple podium positions. Nine students represent India showcasing

talent, teamwork and innovation reflecting commitment to build a stronger future ready society.

At STL, sustainability is central to our purpose. We are proud to hold an MSE A rating and are committed to achieving

net zero emission by 2013. Our strategy is built on three pillars. Environmental sustainability. Since FY19, we have

diverted 276,000 metric t of waste, recycled almost 11 million cubic meters of water, and reduced over 43,000 tons

of carbon through energy efficiency. Over 36% of our procurement is local, and we partnered with Hyenko to advance

clean hydrogen social responsibility. In addition with uh aligned with the 16 UN self uh SDGs, we have positively

impacted 92 thou 920,000 lives through education, empowerment and healthcare. Alongside installing 4,500 kilowatt of

solar capacity, strong governance with two big four auditors and robust governance

committees, we've earned 100 plus ESG awards since FY19. Notably, SGL is the world's first optic

fiber manufacturer certified with zero liquid discharge and zero waste to landfill, setting a true industry

benchmark. Let me close now with our focused areas. In optical, our goal is to be the

world's top three, driving innovation and cost leadership, growing in focused markets, increasing connectivity attach

rates, and rapidly scaling our data center portfolio. This strengthens role as a key enabler of global digital

infrastructure in digital. Lab priority is simple. Grow revenue with profitability through disciplined

execution and scalable platforms. These priorities position STL for sustainable long-term growth. With this, I'll close

my opening remarks and hand over to the operator to open the floor for questions. Thank you.

>> Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press

star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you

may press star and two. Participants are requested to use handsets while asking a question. Particip participants, you are

requested to limit your questions to two per participant. Ladies and gentlemen, we will wait for a moment while the

question queue assembles. The first question is from the line of Mr. Jalaj from Swan Investment. Please

go ahead. >> Yeah, hope I'm audible. >> Yes.

>> Yeah. Thanks for the opportunity. Uh sir, my first question was around the uh the the tariffs and the impact on the

margins. Uh so uh two parts of it. Firstly, should we consider this is the maximum impact uh the the the tariffs

would have had because since uh it was a full full quarter impact we would have had this quarter. First part and

secondly how are we looking to mitigate the impact uh going forward? What sorts of discussions are we having with the

clients and secondly what actions are we taking? One you have mentioned specifically about opening up the plant

in the US. uh is there some other way of of processing or or different location altogether something along those lines?

>> Yeah, thank you. Uh so as we shared we've uh you know this has been a full quarter of uh of the tariff impact. Uh

definitely uh you know ultimately the amount of tariff we pay is a function of the amount of business that we do uh

particularly the the product that we manufacture from India and we sell into the US market. uh as you as you also

mentioned we do have uh some options in terms of uh our manufacturing facility that we have uh in the US um and

ensuring that that is uh you know utilized uh to the best possibility. Um we are evaluating various other options

of how we can uh you know reduce our impact of the tariffs uh but principally as as we have shared our our focus

markets uh and our growth markets continue to be the US and Europe in particular. So we do see that these will

be markets where we we will continue to focus in terms of volume and in terms of the tariff impact itself definitely we

will see what more we can do to uh reduce the percentage that is impactful to us. Uh beyond this I won't be able to

share for you know competitive reasons and confidentiality reasons. Got it sir. And sir uh one point one

more point was uh so let's assume there's a tariff of 20% on the goods. So the realizations we are booking in our

P&L right now would be if the item was worth 100 so we are booking it at at 125 right now.

>> So the the tariff is actually a cost which is on us. It is now up to us whether we can pass it on to the end

customers or not. So the realization will include everything every every cost which we are incurring in order to get

the revenue >> sir. So just to get it right so let's assume the PO so the your your if if the

growth is 20% so it will be partially because of the fact that >> sorry to interrupt.

>> Hello. Yeah, I'm just just closing up the question if you don't mind.

>> Just in order to answer your question, what you have to see is the PO from end customer doesn't mention what is the

tariff and what is the cost of the goods. So the PO comes for the entire amount. Now the question I can delink

with it is whether the customer is absorbing the cost of tariff or not. Currently we are in the process of

negotiation because this is the time when we enter into new contracts that is going on. So then the impact on customer

because of the tariff will be clearly visible. Not right now. >> Got it. Hence

>> thank you. >> Thank you. The next question is from the line of Mr. Nikil Chri from Noama.

Please go ahead. Uh thanks for the opportunity and congratulation on very strong revenue

growth. Uh first question Anit on AI opportunity. So uh we have been talking about uh the uh portfolio uh we are

creating especially related to AI products where we are in that journey and uh the 13 30% revenue comment which

you gave earlier uh any possible timeline when we can reach uh uh 30% revenue from enterprise business.

>> Yeah. So uh u thank you nil. So I think definitely as as we've been speaking this is pretty interesting market

dynamics where you know you have the telecom operators looking to build out networks for themselves. They're also

building interconnects uh for the data center requirements. Um and then you've got the data centers themselves putting

fiber within the data centers and in between data centers. So you know clearly fiber is a preferred medium. Um

what we're clearly seeing is that the density requirements are are increasing where you know space is clearly a

constraint and a lot of our focus on our product development our IP and our technology has been to solve for some of

these challenges. Uh happy to share that we continue to make good progress quarteron quarter. Uh if you would have

seen the uh press release we shared we had almost 500 crores of orders broadly from the enterprise and data center

segment. Uh so uh this is uh where you know our portfolio is now getting converted into uh good order wins and uh

you know as as uh the as the demand continues as our portfolio continues to improve both on cable and connectivity

uh we do you know we do expect this uh ratio that we spoke about 20% uh to move towards 30% in you know probably next 12

to 18 months. >> Uh great very encouraging. Uh second just on margin part I think you

partially addressed it that you're taking some mitigation measure to uh to reduce uh the overall impact uh but

where should we see margin let's say going ahead any rough uh even directional comment about uh where we

are heading uh if we include everything uh the mitigation measure internal efficiency uh where the margin could

settle uh let's say in F27 >> uh we won't be able to give specific number but what we've discussed in our

nl in our previous calls as well you know directionally this is a uh this is a business where you know if we operate

uh with the right utilizations of you know 70% plus uh you know we are confident that ultimately this is a

business that should be 20% IATA margins uh and actually you can see that in our results already that uh you know if you

look exclude the tariff impact then we would almost be at that 19 odd % 1819%. So uh you know I think directionally uh

the uh you know the volumes are increasing our utilizations are improving uh and now it's a function of

how we can uh mitigate the impact of to tariffs look at other ways to you know reduce our cost um and uh that will that

that should help us in our margins uh going forward. But as you can appreciate it's a very dynamic situation uh in

terms of tariffs. Uh there are live conversations going on between the governments in terms of where it

settles. Um so so I think you know hopefully we get to we get some input from the from the government in in the

next few months. Got it. An uh last one if I can squeeze in uh but just wanted your thought on

possible impact of Europe if you have any. That's it for my side. Thank you. >> Uh no nothing currently at uh at the

moment. Again, we are very well set up uh you know in terms of our operations in Italy. We've scaled that up quite

well. Um we of course also have customers in the UK which you know would be outside of this uh this FDA and

already uh we do not have any tariff to that uh to that effect in in the UK. So overall I think it it would be neutral

to us in terms of the the impact. >> No. So but that can increase a beneficial position for us in future but

right now with because we are having a local manufacturing setup already there >> we don't see much impact.

>> Yeah. Got it guys. Uh thanks a lot and good luck. Thank you. >> Thank you. Thank you. Participants are

requested to limit your questions to two per participants. The next question is from

the line of Sakit Kapoor from Kapoor and Co. Please go ahead. >> Yeah, Namaskar Anki G. Namaskar sir and

thank you for the opportunity sir. Firstly, just to uh just to clarify uh the two factors that attributed to uh

the lowering of uh margins are uh particularly the labor law uh implementation affected in the P&L and

the tariff impact. Are these two the key reasons why the the prop uh the margins are lower to 13% uh 10 10.3% debit

margin? uh so uh labor code impact we have considered as an exceptional item so that is not reflective in the IITA

margin. So the only impact which is material enough uh is the tariff impact which we have clearly demonstrated if

you see on the investor presentation. >> Okay. And taking that into for if uh if you could just elaborate uh just

quantify for us how much have been the impact as MPG was mentioning about the PO uh order from the customer that does

not take into factor the the tariff impact. So which line item uh does the tariff uh get displayed whether it is

the other expenses or the cost of raw material uh where do we factor in the tariff impact? So generally the tariff

impact on the exports what we do is uh settled in the cost of raw material and component consumed.

Uh then there are because we are having a local manufacturing unit part of it is also in the others.

>> Okay. And next question number two was regarding the the utilization levels for the US and how are the OAF and the OFC

prices currently trending sir? >> Yeah. um circuit soap I think as we shared last time also we we're not

disclosing uh utilization levels uh at you know unit level or company level but broadly what we can share is that the uh

utilizations have improved uh you know quarteron quarter um one thing that we are mindful of uh particularly uh you

know in our in our glass operations uh is availability of germanmanium uh as we have shared in the past as well this is

uh something that is tightly controlled particularly by uh in China and so uh the continued availability of

germanmanium will be important factor for our uh manufacturing of glass uh and then ultimately fiber and cable so

that's something that uh you know we are mindful of uh but we are taking all actions to to mitigate that risk um from

the uh pricing perspective I think overall it it has been stable it has been uh you know steady uh both in in

China as well as in globally. Uh so I I do I don't see any concern on that side. Um and as we said that ultimately for

players like us who are supplying into Europe and US, we are focused on you know long-term contracts with our

customers whether it's on the telecom side or the data center side. >> Okay. So your small answer is that

prices have remained the realizations have remained somewhat flattened or in the same vicinity that was for the

second quarter. So there is no up. Uh yeah >> yeah there's no decline for sure. I

think the the prices always vary a little bit by market. Uh but as I said for us we we don't really play in this

spot market at all. We're just focused on our solutions for you know long-term contracts with our customers.

>> Okay. And last point was about the bhat net uh rolling out sir and we and our participation uh in the same how are we

seeing traction on ground with respect to uh how the rollout for for bat net has been sir in the country. Um I think

it is uh currently going on. Uh this is a phase three that is going on and uh as you know our uh you know group company

in Venya has secured Jammu Kashmir package uh where we will be supplying the cable on armsland basis. So that is

going on. Uh we have also achieved what is called a map you know manufacturing authorization from from few other

biders. uh and uh I think it's still initial stages in terms of the execution uh so probably uh you know through the

course of this year and next two three years uh is where we expect the uh roll out of the optical fiber cable.

>> Okay sir sir >> yeah thank you sir >> the next question is from the line of

Mr. Bala Subramanyam from Aihant Capital please go ahead. >> Uh good evening sir. Uh thank you so

much for the opportunities sir. My first question I think we are working on next generation fiber technologies especially

when we can expect the commercial roll out for halo fifer uh hollow ecore fiber hcf and uh g654 e fifer and uh what is

the projected adoption rates in long haul networks and data center interconnects?

>> Yeah, so I'll touch on holo core first. I think that's a it's a very exciting technology. Uh it's in the public domain

that particularly Microsoft and Amazon are are really looking to deploy this at uh you know a good amount of scale.

We're also seeing some deployments of this in in China as well. Um so so clearly it's it's it's moved from say

the phase of uh you know concept to being on the ground. uh I think practically over the next two to three

years is when we see you know larger scale rollouts happening uh it's still uh uh you know there are uh say

commercial challenges to deploy this fiber in terms of the cost of manufacturing is extremely high and uh

uh the process speeds are are very very low for for all the manufacturers globally. So this is where uh you know

there will be certain time and effort to scale this up and make it viable uh from a larger uh you know larger scale

perspective but uh the impact to the network and the impact to the to the hyperscalers is very real. Um so it's

quite an exciting uh you know time to uh to work with them. Uh just to be clear there are no global standards still set

on holocore. So that also has to be done in terms of an industry standard uh to create to make sure that uh this can get

rolled out at scale. Uh G654 as well in in some similar ways is a little bit more advanced. Uh there is a reasonable

amount of demand that we're seeing uh globally. Uh but again this is uh uh you know uh we we do see the realizations to

be uh definitely better than standard fiber. uh and it can enable typically 70 to 100% longer reach. So again there is

a uh you know a good amount of opportunity here but I would say less than you know 5% of the world market uh

is uh is with this fiber right now but good potential going forward. Oh, so my second question I think we

have been partnership with gold technology services for multicore 5. I think the trial for almost sorry to

interrupt can you rejoin the queue for more question. >> Okay ma'am.

>> Thank you. >> Thank thank you >> in participants in order to ensure that

the management answers all the question you are requested to limit your question to one part participants.

The next question is from the line of Dhawal Jane from Sequent Investments. Please go ahead.

>> Uh hello sir. Uh so my couple of questions are the first question is uh as uh uh the North America revenue uh

contribution has increased from 25% to 36% uh versus the last year. So I just

wanted to understand like we have a tariff impact of 7% on our margins uh due to this. So going forward uh what I

understand is if this revenue contribution keeps on increasing will our you know the uh tariff impact keep

on increasing and the margins keep on dragging further down. Uh so yeah hi Dal so basically see as

Ankit mentioned previously we majorly act into the major long-term contracts. So uh ideal way to deal with it is that

we yes we are bullish on the US market but at the same time the tariff impacts can be passed on to customers only at

the time of renewal of contracts. So that process is currently going on. So while the US revenue is expected to

increase with the mitigations measures we are already working on and few of them are now in place. We don't expect

any further increase. >> Okay. Uh and also one more question on the Yes.

>> You are requested to rejoin the queue please. >> Uh

one more question. >> Yeah, you can go ahead. One more question.

>> Okay, go ahead. >> Thank you. >> Yeah. Uh so uh the question I I wanted

to understand is uh you know on the uh the growth that we had in the revenues uh was it more of the volume growth or

the realizations have also contributed in the growth or the 20% y growth? Majorly it's a mix of both. Uh yes

volume has played a significant part uh in it. Uh but at the same time the sale of high fiber count cables has also uh

increase this top line >> uh the AI1 >> uh not so on the AI1

>> overall value added cables and uh you know more higher higher tech cables. >> Yeah. So the ballpark I mean could could

I get an understanding of what would be the split between the volume and the value?

>> No we won't be able to share that sir. >> Uh okay sir. >> Thank you.

>> The next question is from the line of Akshhat Mahhata from seven rivers holding. Please go ahead.

>> Uh yeah hello. Am I audible? >> Yes. Yeah I accept. So I just I just wanted to ask you uh an update on on the

lawsuits right what is happening on the US lawsuit and if you can share some light on you know this income tax order

that has come in uh you know what is that and what is the impact >> can take the income tax first okay

>> yeah so see this income tax matter is in the regular assessment uh there are some transfer pricing adjustments for which

they have uh issued this notice we are quite quite confident that u with the merits we are having in the case no

material financial impact is going to be there and we we have already disclosed it in

detail if you see uh with the prefer >> so are we going to make any provision or we have to deposit some amount or

there's no impact as of now >> as of now there's no impact but as per we will have to go by the rules only so

uh there can be a chance of some deposit but that doesn't exceed more than uh 15 to 20%.

>> Okay. And uh linked to the the legal matter in the US. So in September 2025 our US

entity uh against which the case is there uh it has uh appealed the district court's judgment and now it the case has

moved to the US court of appeals. um and uh whatever was required in terms of posting the bond uh that has been done

successfully and there is no financial payout obligation uh at this stage. So as uh we are confident of our uh of our

appeal uh we we believe we have a very strong case. So as that uh as that progresses we shall of course update it

as a fiduciary duty. >> Okay. Thank you. >> Thank you. The next question is from the

line of Bajang Bakna from Sunnidi Securities. Please go ahead. >> Uh congratulations for uh uh good uh uh

growth. So basically sir in our existing order book which is closer to 5,000 crores. If you would like to understand

suppose the uh US uh trade deal doesn't materialize in next uh couple of quarters and uh since you are

negotiating the new orders when can we see the impact of past orders pinny uh you know getting rent and the new ones

will be visible in the margins itself uh you know that will be uh you have indicated close to,000 crores will be

executed in uh uh next quarter. So when the older contracts will expire and the new uh pricing will kick in if we just

try to understand from that perspective. Thank you. >> Um yes. So so see there is going to be a

gradual shift from it. So we'll keep on getting new orders. We'll keep on supplying against the long long-term

contracts which we are having in past. Good thing is that in US generally the contracts are currently in the range of

12 to 15 months. So we'll start see part of the impact from the next quarter onwards

and the full impact will take some time. It is going to be a matter of two to three quarters wherein no old contracts

will be fully settled in and all the new contracts will jump in. >> Yeah.

>> Okay. Just try to understand the past contracts at which rate you have taken and the new rate which is going on

currently. What is the difference in percentage terms if you could help that out to us? Sorry that we can't disclose

on the sorry we can't >> no only in percentage terms I'm not asking any absolute

$15 of >> I mean see obviously the tariff rate is

uh is is 50%. Uh and logically you would want to share some part of that cost to the customers but really it just varies

from customer to customer uh the product portfolio you know various other terms of the contract. So that's why we can't

give you one number. It'll all be down to what we are able to negotiate and uh you know create that balance between the

right uh the best pricing as well as uh you know ensuring we get long-term uh partnerships.

>> Thank you. So next next quarter onwards your margins are going to improve even even with the 50%

>> Mr. Okay. Thank you. >> Thank you.

>> The next question is from the line of Mr. Sunil Jane from Nirval Bank Securities. Please go ahead.

>> Yeah. Uh uh so my question again relate to the US and uh uh we had seen impact of the curren of the tariff but uh uh on

the currency side uh are we going to benefit and how is the hedging policy for contracts uh to supply in the US?

Uh so we we do have a robust riskmanagement policy which makes sure that the uh fluctuations in forex does

not impact us in the short run but as you rightly said in the long long run when the we'll start getting new orders

and against that we we are going to supply there is going to be a positive benefit because we are actually net

exporter by far uh almost 80% of our revenue comes from outside India and with the with the local manufacturing

setup we are having in Italy and So uh you mean to say that uh uh whatever the uh order you are booking

you against that uh you book the currency or uh yeah yeah so we have the robust hedging policy wherein we don't

keep any exposure open. >> Yeah. >> Okay. So the benefit of uh this will

come gradually not uh at >> Yes. Yes. >> Okay sir. Thank you.

>> Thank you. >> Thank you. The next question is from the line of Mr. Adita from AK investments

please go ahead. Yeah, thanks for the opportunity. But I wanted to understand one thing. We have

facility in the US and we have multiple facilities outside India. I know I understand that India

has 50% tariffs but in a single quarter if I do the math we are burning I mean the impact is 80 crores that is very

huge and for an year if I do it is 300 crores that we are putting out. So what is the strategy? I know you don't want

to get into specifics but can you help in as an investor I mean uh we think still as a global player and they have

the facility in the US but this but this impact is really very huge number >> so how do you plan to yeah utilize the

US facility how do we mitigate that yeah >> yeah so look I mean currently we have manufacturing uh cable portfolio in uh

in the US we have it in Italy and of course we have large scale mother plant kind of operations in India. Um and we

are very very mindful of uh you know three four things we want to ensure that uh you know we we produce we there's a

variety of portfolio products that are manufactured across our facilities. So we always have to be mindful of where

where the demand can be met from an operating perspective because there's a there's a large variety on what products

get produced. Uh the second part we have to be mindful of is uh you know which is a which is a place uh most optimized

from a customer demand perspective where customers require certain lead times and where do we operationalize and then of

course is is the is is the is the current you know impact of the tariff uh which currently is at the full uh you

know 50%. So we are we are very mindful of uh you know the the impact and the quantity uh that it is affecting us on

uh on the quarterly basis and uh as as we shared earlier multiple actions are on to see how we can minimize the the

tariff while at the same time we continue to see strong demand from the from the North America market. uh

currently we do also have uh options of manufacturing in Europe as well and supplying into US. So all those we are

we continue to evaluate um and be rest assured that uh we continue to take actions where uh the effective

percentage rate uh will will uh will reduce uh but uh but certainly from an absolute amount that's something we

continue to watch uh if and as and when our uh you know uh business to the north to North America and to US continues.

Sir this is only the optical network we are doing 30% for North America I mean 30 to 35%. In that the whole impact I

mean ATCR if I take it it is only coming from that 300 odd course of revenue is that the right math.

>> So you can try to do that math but there are two three things which is related to tariff. one is whatever the finished

goods or the semi-finish goods we are selling from India and then the import we are doing in US from India other than

these uh optical fiber cables so that maths will not properly fit in if you try to find a number out of the revenue

what we can tell you is that yes the as you rightly mentioned we have been continuously increasing our US

production which can mitigate this these tariff impacts partly along with it we are assessing all the other measures to

mitigate the impact to the minimum possible. >> How much can the US facility help us? I

mean if you can share in a I mean ballpark number or percentage. How much? >> No, I look I think uh if you've seen the

the investments we've done I think more than $50 million of investment to build a factory of a certain scale. Um and I

think our intent has always been uh strategic to serve the market both from the facility there as well as from

India. Um as you can appreciate that uh there is uh you know real intent from both governments to sign a you know at

least an interim bilateral trade agreement uh which which which has been imminent for some time now and continues

to be imminent. So we are mindful that we we need to maximize from our operations uh you know outside of India.

Um at the same time we also need to look at other options of how do we reduce the the tariff impact. So all all the

actions are ongoing. Um and uh of course ultimately we do hope that uh some sort of trade trade agreement does come

through uh which will definitely impact and benefit uh STL. >> Sure sir. All the best. I hope that we

will be able to navigate this one and uh we'll be able to ramp up and use the US facility at utmost utilization so that

we can minimize the impact. That would be yeah. >> Thank you. The next question is from the

line of Anul Sagel from Sagel Capital Advisor LLP. Please go ahead. >> Um, thanks for taking my question. Um,

you mentioned Germanmanium as a prospective risk in case China stops uh supplying that as a raw material. What

is the mitigant? Do we have uh alternate uh raw materials or alternate supplies of germanium?

>> Yeah. So as I said we've uh you know there are global uh global sources uh available in terms of um there are

global while China is the majority there are other global uh you know geographies available for sourcing of geranium which

we are both evaluating and pursuing. Um so that's that's really the uh the the primary option. Of course from China

itself there is a procedure and a process to source the the geranium which we are also pursuing uh including with

all the government channels. Um and of course we also have a facility in China itself uh which we're also utilizing uh

where you know we can use the German germanmanium that's available locally. So multiple multiple avenues are all

working in parallel and uh we're we're confident that we'll be able to solve uh any challenges we face.

>> Uh thanks. Um secondly um nearly 30 to 35% of our revenues come from North America. I'm assuming most of this will

be from the US. from our US facility. Um are we able to uh you know kind of um cater to this entire revenue or only a

part of this revenue assuming that the US facility uh operates at full utilization?

>> So currently it's only a part of revenue. So it is a lengthy process to qualify your manufacturing unit for all

the standard products which we do. And if you see in the last two three quarters the entire requirement has

changed to high fiber count uh ribbon cables uh for which there's a standard process in order to get the

qualification. So all that is currently going on uh with a clear objective of utilizing US facility for full uh and

then using India for the trading of the other materials or other capab >> not sufficient. Yeah. So there will be

incremental supplies always from other countries particularly India. >> Yeah. Um also in the same same light um

you know can you can you give the number of volumes uh that we did for this quarter

>> uh for the whole company that is >> no we actually don't disclose uh volumes

or capacities for competitive reasons >> okay not total capacities also I mean not for a plant but okay

uh okay so I mean uh you know asking another question I mean we've we've peaked out on revenues in March 2020 I

think where we did around 5,100 >> sorry ma'am this is just a this is just a continuation of the question just hold

>> we've done 5,100 cr revenues in 2020 um assuming we do full utilization of our capacity will we be able to reach that

number or exceed that number given current uh current pricing. >> Yes. Yes. That we're confident.

>> All right. Thank you very much. >> Thank you. >> Thank you ladies and gentlemen. Due to

time constraint that was the last question. I would now like to hand the conference

over to Mr. Ankit for closing comments. >> Thank you everyone for taking your time to hear us out. Uh we remain very

excited and motivated uh to drive this business forward and unlock its full potential. Through our efforts uh we see

a tremendous opportunity to connect the unconnected across the world and especially here in India at every

village level. We truly believe STL is well positioned to play a pivotal role in building the dig digital

infrastructure around the world. We're happy to take any of your questions both AJ and I are available through our IR

team. Once again, thank you for your time and your continued support. Jah >> on behalf of the light technologies

limited that concludes this conference. Thank you for joining us.