STL Q2 Results: Stock sees sharp, volatile moves after 32% revenue growth, margin expansion

Shares of Sterlite Tech or STL, which were locked in a 5% lower circuit before its results announcement on Friday, October 23, broken out of the circuit, turned positive after the results announcement, before falling back into negative territory and then recovering again.

For the September quarter, STL reported a net profit of ₹517 crore, compared to ₹197 crore it reported in the June quarter. Profitability during the quarter was aided by revenue growth, margin expansion and a one-time tariff refund gain, the company stated in its investor presentation.

Revenue for the quarter stood at ₹2,529 crore, a growth of 32.4% on a sequential basis. The company had reported a topline of ₹1,910 crore in the previous quarter.

Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the quarter more than doubled quarter-on-quarter to ₹812 crore from ₹385 crore earlier.

EBITDA margin saw an expansion of over 12 percentage points during the quarter to 32.1%. Margins during the June quarter stood at 20.2%.

During the quarter, the company reported a $1.2 billion multi-year hyperscaler order win and another $1.11 billion product award letter from a hyperscaler.

An order win worth $210 million from an international telecom company, along with a ₹960 crore multi-year optical cable supply order agreement with a leading Indian telecom operator were some of the other key highlights during the quarter.

At the end of the first half of the current financial year, STL's Global (Ex-China) Optic Fibre Cable Market Share stood at 9% from 7% during the same period last year.

For the first half of the year, DC & Cloud business of the company contributed 53% to the overall topline, compared to 75% during the same period last year, while Telecom & Citizens network is a new addition to the business, with a 33% contribution. Large Enterprises vertical contributed to 14% of the topline from 25% last year.

At the end of the September quarter, Sterlite Tech's open order book has grown nearly 4.6x from last year to ₹35,274 crore, while backlog schedule stood at ₹32,253 crore. Net cash balance during the end of the quarter stood at ₹703 crore.

Under Roadmap Lakshya for financial year 2027-2029, STL plans on increasing its revenue by over 4x to ₹20,000 crore from ₹4,750 crore in financial year 2026, while it has upped its margin guidance to 30% from 27% earlier.

Shares of STL have yet again recovered from the lows of the day and are now trading 3.8% higher at ₹831. The stock has surged over 700% so far this year.