Sterlite Technologies | Digital India play


(ramanhp) #180

(Pratik--Patel9) #181

Great set of numbers posted by Sterlite! PAT has jumped by 84% YOY. Order book looks strong as well.

However, the most concerning point is that the pledged shares of promoters has increased to 97%!!

Sterlite is one of top holdings in my PF and it is growing by more than expected but this level of pledging looks extremely dangerous.

Do you guys think its worth it any more? How much importance would you give to the risk of pledged shares given the kind of growth prospects and tailwinds the company is facing?


(msahani) #182

(Pratik--Patel9) #183

Thanks. Does this mean the company has taken loan or is it promoter who has taken loan personally. I didn’t quite get that.


(Pod85) #184

‪The anil Agarwal group needs money to delist vedanta on the LSE. They have taken a large loan from JP Morgan and pledged group companies like STECH promoter holdings !!‬


#185

Not sure but just my observation that Increase in Sales are almost equal to increase in trade receivables!!!


(spachiap) #186

I am always wary of investing in commodity plays like Sterlite, where supply/demand can have a huge impact. Given that there is 5G buildout happening, along with general data usage growth worldwide due to growth in video streaming services and Cloud Services, it bodes well for Fiber Optic Sector overall IMO (I am talking in language, without substantiating with numbers, but looks like the Fiber sector may not be hit with over-supply in the near future)


(Pratik--Patel9) #187

It might be pure naivety on my end but I can’t fathom how Sterlite’s business can be categorized as cyclical?

Unlike sectors like metal or auto mobile, broadband network related businesses are not directly linked to interest rates or government spend or economical cycles. Also, not all data or cellular network providers upgrade/expand their network at the same time. JIO is already based on modern technology where as others are in the process of matching up. Same is true country wise. US might be more than 70% covered by broadband network while India is below 10% so the demand from India will continue for longer. Some other country might catch up after India. In other words, I fail to understand cyclicality in optical fiber business.

Can you please throw more light on it?


(ramanhp) #188

I guess more there is a clear demand and supply mismatch playing out here. Rapid Increase of IOT is demanding faster and stable internet, thereby feeding more demand. So, it is like a ripple affect where internet usage is triggering even further usage.


#189

Satellite and OFC not “compete” but “complement” each other, so where you can not lay fiber optics cable like in Sea or difficult terrains, satellite can be used to carry data for Cloud and AWS as cloud leader dont want to leave any “blind spots” for their cloud business, as for cloud “connectivity” is MUST and without connectivity your cloud resources are USELESS… I am from Telecom field and I dont know how I missed this great opportunity, but as we have reports from very reliable sources like “light reading” Fierce Wireless" etc and Sterlite tech get almost 50% of their revenue by exports is also positive that they are not only dependent on govt or Indian specific orders, also acquiring Italy company also looks good that they are serious player in Europe as well… Fiber is backhaul not only for 4G and 5G but also for Wi-Fi network as well, so even High speed internet at railway station also need fiber as backhaul, so I am convinced with the story, but I was not sure how you can get 25% plus EBDITA with fiber optics, but they are doing it consistently, so all in all its great stock to play “dada story” which will multiply post 2020, post 2020 Tokyo Olympics, as Tokyo Olympics will be start of 5% era across world and India will be ready at the most by 2022 in 5G deployment.

Disclaimer: not invested but considering for serious investment in this “data play” opportunity


(msahani) #190

An insightful presentation by the CEO of STL’s Telecom Business unit.

Discl: Invested


(ramanhp) #191

We are looking beyond fibre. We now design end-to-end network solutions for fibre-to-the-home, fibre-to-the-enterprise, and fibre-to-the-small cells,group chief executive of Sterlite Tech told ETTelecom, adding that the new portfolio involves end equipment and software as well as a deployment solution.


(Ranga Kiran) #192

Company’s announcement: We wish to inform you that the Company has won a Rs 1,512 crore MahaNet-I project for the implementation of BharatNet-II in Maharashtra.

A copy of the Company’s Press Release in this behalf, is enclosed herewith.

Kindly take the above on record.
1f1196b2-37fb-4f11-9507-f8123e527acb.pdf (835.9 KB)


(Pratik--Patel9) #193

This business is on a roll!!

The recent order it received from Indian Navy is in itself larger than last year’s total revenue!! Add to that this new order of about 1000 crores which is 33% of last year’s revenue.


(Anupam) #194

image

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Few snapshots to summarize growth, valuation & forecasts. This might help us joining the dots.


(rupaniamit) #195

Management’s response to pledging question on Q2FY19 Earnings con-call.


(Shyam) #196

I am not comfortable with near 100% pledging, especially when it is for activities outside of the invested company. Need to look at the promoter (TwinStar) a bit more carefully before I increase my stake (invested in Aksh and Sterlite).

Found one article about TwinStar holding company:
http://www.minesandcommunities.org/article.php?a=9685


(bimalb) #197

This article says that India is 1/5th of US and 1/10th of China on fibre placed underground. With Govt pushing 2020 deadline to rollout 5G, demand for fibre optic cable is bound to grow. Who would benefit from this needs to be seen.

http://www.ecoti.in/73BTcY

In the above video, Mukesh Ambani recently said India would be 5G ready ahead of other nations. If Jio pushes other players need to upgrade as well. In any case fibre optic demand would increase. There are not many players in this segment.

Disc - Holding sterlite tech, vindhya tele, birla cable


(ramanhp) #198

There is Aksh Optics and HFCL too. Aksh recently increased its capacity.

Disc- Invested in Sterlite


(learning) #199

But both are not pure play Data players. IMHO with diverse nature of the business and not so great financial results as compared to Sterlite.