Sterlite Technologies | Digital India play

(rvetri) #61

I dont remember management guiding EBIDTA margins going down. On the contrary, as capacity utilisation goes up further, the ebidta margins can only go up…And as spot prices keep going up, the long term price trend must also go up…Ster tech is atleast a decade story…from here…

(ramanhp) #62

See response on concall : See Mukul, this is Anupam here and I will address this question. So overall this margin
improvement which we have seen in Q4 is a result of couple of things. One that the products
and services the ratio has been more skewed towards product. We have delivered better
volume as compared to Q3 particularly on the fiber cable side where we have seen a better
utilization coming close to 90% of capacity which was running at about 60% till last quarter.
So that is one and that is also given us operating leverage in our operating performance. So that
is sustainable. Number two, in terms of contribution of the new product continues to be there,
so that is similar to last quarter, so that again plays a role. Definitely the margin coming in
from better realization is also spanning out because we are saying that we continue to remain
in long-term order book, so we do not have any spot order booking and therefore that revenue
or that realization. But overall, we can see part of this margin sustaining. We believe in
growing the absolute value of EBITDA, the margin is a derivative of mix while if you look at
from the full year perspective, we are still at 25%, so I think as long as we continue to maintain
this kind of revenue mix, we would see that 24%, 25% margin. But absolute EBITDA we are
quite sure that it will continue to improve on quarterly basis

(Mridul) #63

Yeah…i already captured this point in my post. Please take a look at the concall post in full. What i emphasized is that ebitda will rise but not ebitda margins especially post fy19. This is exactly what mgmt has said. What else are you trying to say?

Also, we shud not be selective. Check mgmt answers to global capacity, supply demand post fy19 as well. They did not confirm anything. Rather, they said, they are not sure when will supply come online and how wd that effect overall ebitda margins.

If we just go by mgmt guidance, no point analzing. We will always be reactive rather than proactive.

Anyways, as i said, different people will have different perspectives. They see the very same line spoken as per their biases.

(kv) #64

Interview with executives of a small company trying to enter the optic fiber preform market. Has their biased views (since they are starting in this space, they are obviously seeing opportunity). They do mention on difficulty/barriers to entry but still they are entering:

Some excerpts:

They think they will get to 40% EBITDA margins!

(ramanhp) #66