Beat on all fronts; order intake stands out
Sterlite Technologies (STL) reported better than expected Q4FY26 numbers with revenue at INR14.4bn (+14.6% QoQ/+37.0% YoY), above our estimate of INR13.5bn. Adjusted EBITDA margin came in at 14.7% (+520bp QoQ/+280bp YoY), above our estimate of 13.3%. Adjusted PAT was INR280mn (INR20mn loss in Q3FY26), below our estimate.
STL delivered the highest ever deal wins with 1.4x QoQ/4.8x YoY uptick. Strong order intake provided the much needed growth visibility. Increased data centre contribution and higher utilization shall support margins. We value STL at 15x Mar-28E EBITDA (earlier 11x), yielding a TP of INR440 (INR280 earlier); maintain ‘BUY’. At CMP, STL trades at ~8.3x FY28E EV/EBITDA.
We believe that Sterlite will be the key beneficiary of strong demand for fiber optic cables, given increasing fiberisation of towers, 5G rollout across geographies, increasing FTTH opportunity and BharatNet project. Sterlite is expected to leverage its capacity expansion with a new manufacturing plant setup in US which will drive further growth and bring down logistics costs. A superior cost structure due to integrated operations will lead to EBITDA margin expansion and improve return ratios, despite planned capex. The company is strategically expanding its portfolio of services leveraging its knowhow of complex network and relationships from the fibre business.
