Sterlite Technologies | Digital India play


(Pratik--Patel9) #200

I would stay away from Aksh because of notorious and cheater promoters. When whole sector is going after increasing capacity for optical fiber manufacturing, they are investing in optical lense manufacturing!
Consistent insider trading. Illegally shifting equity to and from promoter entities etc etc


(Pratik--Patel9) #201

I am not sure if china and USA can be compared to India because area is not the same. We are way smallet than these two in terms of land area.


(rvetri) #202

I agree… There simply are no comparable players to Sterlite Tech in India… Others are just nowhere …


#203

This is not related to area but total data capacity needed for 5G for 1.2 Billions ppls. I feel lots of optical fiber needed to be laid in India to deploy 5G by 2020 and as JIO considering 5G roll out by 2020, so I feel Sterlite tech and other Optical fiber companies will get benefit.


(learning) #204

Agree to the statement companies will benefit.

But we are minority shareholder, will we also benefit in all these companies. Even for that matter in sterlite - with the pledge overhang, Let’s say for some reason or the other pledge is revoked. We as a minority shareholder wont get any benefit. Just my two cents.


#205

Where are the experts who said satellite can’t disrupt fibre. Ofcourse it will take sometime.

The company is expected to spend more than $10 billion to build and launch a constellation of satellites that will provide high-speed internet coverage to just about every corner of the planet.


(msahani) #206

You may turn out to be right pl. that’s why investing is hard. Simple but not easy. Disruption risks always exists in Technology driven businesses.

https://www.quora.com/Why-dont-we-use-satellites-more-than-undersea-optical-fibre-cables


(msahani) #207

(rvetri) #208

Everyone talks of these satellites are coming in next 6 months for last several yrs… And they are yet to come… And all the governments in the world are similarly focussed on densifying their optical fiber networks… If governments think that satellite is a solution, they won’t be spending more on fiber assets…

I asked Tejas networks this question in their con call…as their demand will be impacted if satellites are going to disrupt fiber… And their answer was - satellites cannot offer high capacity, but they can offer speed… Only fiber can offer capacity… And it is good that satellite based internet is coming… As they will connect people in remote areas where it is not economical for fiber to go… So satellite internet will complement fiber in reach … But satellite cannot offer high capacity like fiber…

A similar answer from Sterlite Techs investor relations too… And further proof… Softbank invested USD 1 bn in oneweb… A satellite internet Co… And Son was talking about it 18 - 24 months back as a big thing… But he had gone silent on it after that… Last i heard is that Softbank want to exit that investment as it now thinks it is a bad investment…


(msahani) #209

Thanks. I too read about the SoftBank news last week. What an interesting 2 side perspective.


(msahani) #213

It looks like due to increased expansion and acquistion of Metallurgica, the $100mn. PAT target will now be achieved by March 19 instead of March 20 projected previously. From 2:00 onwards


(msahani) #214

(gauravksinha) #215


Can this be a big disruption for optical fibre business.


#216

I hold sterlite technologies. Its a high conviction bet. But somehow, from high of 380 odd its fallen below 300. Whats the issue, I cant find any news or recommendation. Most of the news is of big orders, 5G, partner with Jio etc. However, The share price is range bound 280-380 , oscillating.

Is high valuation, high debt, share pledging, issues with Vedanta, Sterlite chemicals etc plaguing the sentiment, I don’t know.

Fellow boarders invested, tracking sterlite or coming from technology/telecom background can throw more light on this. Thanks

Scuttlebutt Information
Sterlite is hiring a lot of telco/oem professionals and strengthening their team. Not just fiber but hardware, AI, E2E solutions etc.


(msahani) #217

Nothing tests conviction more than falling prices. Agree that there are issues around high debt, share pledging etc. but in context of the expected growth for the next 2-3 years and the quality of growth (ROE/ROCE), it is available at not very cheap but decent valuations. Even assuming a PAT of 575 cr. for FY 19 and 750 cr. for FY 20, it is now available at 21 times expected Fy19 and 16 times FY 20 earnings. Even if the multiples do not expand from here (unlikely), but the earnings trajectory remains intact @25-30% CAGR for the next 3 years till FY 22, then investors can still make a decent 20-25% CAGR return even in the most pessimistic case which is not a bad expectation or return to make. Unfortunately, the last bull run has spoilt all of us and a 20% cagr for 3 years doesn’t look v juicy.


#219

Promoter has pledged 100% of their holding, this is not perceived as good.


(S_Banerjee) #220

I agree, only reason I am away from this company.


(phreak) #221

Wrote this back in July, I think still relevant to people who are wondering why this is correcting. Current P/E of 26 is still very expensive here since this is a commodity stock. If you notice, YoY growth is already moderating and the moderation should continue as the base becomes bigger and P/E will derate to 15 levels in FY20. Just my 2 cents having seen how commodity stocks with tailwinds behave.


(learning) #222

While I agree it is a Commodity business at the end of the day. But specifically, ST, if compared to other Indian competitors is giving better margins and growth rate overall. e.g. HFCL hasn’t been able to grow much if we compare last 5 years as such and had very topsy turvy way of profit. In comparision, ST has been doubling their profit over every 3 years. I believe it is doing something better than its competitor. So, the business is in commodity space but is not behaving purely like a commodity company.

Though, I might have ownership bias here. Would be great to hear your counter view.


(kashif kidwai) #223

Sterlite is not a commodity business. It is one of less than 10 companies globally which have the technology to manufacture preform - which is used in the manufacture of fibre and is its most essential component. This has been explained in a detailed presentation by Samit Vartak at Indian Investing Conclave. The presentation is for subscribers only and hence I cant share it here. What I understood is that it is a proprietary technology protected by 189 patents which Sterlite has and it is very difficult to copy. This gives them a strong competitive advantage and would be a tailwind due to the increased demand for high speed data.

The stock is correcting in my view because of the broader market correction and promoter pledging.