Shares of Sterlite Optical dropped 5.07 per cent to Rs 65.50 after US-based JDS Uniphase gave a lowered revenue guidance for the quarter ending 30 September 2002 on Monday.
The stock of the optical fibre cable maker clocked a volume of 5.21 lakh shares on the Bombay Stock Exchange and the National Stock Exchange combined.
US telecom equipment major JDS Uniphase said it sees continuing weakness in the telecommunications markets for its fibre-optic components. The company estimated net sales for the quarter ending 30 September 2002 at between $190 million and $200 million -- 5 per cent below its earlier guidance of $200-210 million.
JDS reiterated its earlier guidance of a pro-forma loss of six to eight cents per share, excluding charges under its restructuring programme.
JDS Uniphase is a technology company that designs, develops, manufactures and distributes a range of products for the fiber-optic communications market, deployed by systems manufacturers worldwide to develop optical networks.
Sterlite Optical, too, designs, develops and manufactures the same range of products as JDS Uniphase and shares the same market. JDS Uniphase is a leader in optical fibres worldwide.
Players feel the earnings warning from the global leader indicates troubled telecom equipment markets and may further affect Sterlite Optical.
The company has been on a sustained downtrend on the bourses and has been among the worst hit scrips over the last few months following depressed market conditions for optical fibre and optical fibre cables in the domestic as well as international markets.
Further, the company has said that a sustainable recovery seems unlikely in the near future. Prices of optical fibre and optical fibre cables continue to be weak.
The drastic reduction in Bharat Sanchar Nigam's (BSNL) jelly-filled telephone cables' tender quantity to 50 per cent of last year's requirement has resulted in a reduced market for optical fibre cable makers. Prices of optical fibre cables, too, are much lower than that of previous years.
In the domestic market, the demand originates from public sector companies like BSNL, Mahanagar Telephone Nigam (MTNL), Power Grid Corporation of India (PGCIL), Railways and Gas Authority of India as well as from private sector groups like Reliance, Bharti, Tatas and Hughes.
To add to the woes, the optical fibre cable makers' exports have nearly ground to a halt following a downturn in the US telecommunications industry, which was the main market for optical fibre and optical fibre cables. Global optical fibre prices have also crashed in the last few months, following the depressed state of the US telecom sector.
