Sterlite Tech Q1 profit jumps multi-fold to Rs 116 cr as Covid curbs eased

Sterlite Technologies posted a multi-fold jump in its consolidated profit at Rs 115.75 crore in the first quarter ended June 2021, helped by business gains post easing of Covid restrictions.

Broadband technology company Sterlite Technologies on Thursday posted a multi-fold jump in its consolidated profit at Rs 115.75 crore in the first quarter ended June 2021, helped by business gains post easing of Covid restrictions.

Sterlite Technologies (STL) had recorded a profit of Rs 5.96 crore in the same period a year ago due to the impact of pandemic.

"First quarter of last year was most heavily affected by the pandemic. Even this April-June quarter had some impact of the second wave but the sharp jump in PAT (profit after tax) is largely because of the extent of the pandemic last year," STL group chief financial officer Mihir Modi said.

The revenue from operations of STL increased by about 49 per cent to Rs 1,309.23 crore during the reported quarter from Rs 876.2 crore in the corresponding period of 2020-21.

"This is clearly validation of what we have been seeing in the market and preparing ourselves to benefit from that. We are looking at around a 10 year network building cycle," Modi said.

The company in a presentation said that its total addressable market for all the broadband technologies it offers grew by about 5 times in 2021 to about Rs 2,97,800 crore.

He said that international markets have now started stabilising and overseas business now contributes more than half of total revenue of the company.

The company also announced acquisition of UK-based network integrator Clearcomm Group for which STL will pay around Rs 125 crore for the first tranche of the transaction to buy 80 per cent stake. STL will buy the rest of the 20 per cent in Clearcomm Group in 2023.

"The purpose of Clearcomm acquisition is to primarily acquire capabilities. The founder and employees of the group will continue to operate Clearcomm as a STL group company. The acquisition significantly boosts our UK foray. It will give us a foothold in Germany and Italy," Modi said.

The company's order book grew by 8.7 per cent to Rs 11,200 crore in the April-June 2021 quarter from Rs 10,300 crore in the year-ago period.

"Around Rs 4,200 crore out of Rs 11,200 crore is executable in financial year (FY) 2022 and remaining Rs 7,000 crore order is deliverable by FY 2023 and beyond. Around Rs 2,500 crore out of Rs 11,200 crore is in the nature of warranties and maintenance, spread over 4-5 years," Modi said.

The STL board also approved raising of Rs 1,000 crore and reorganisation of its businesses to make them more tax and regulatory efficient.