Q2 FY27 · NSE: STLTECH

Sterlite Technologies

Results filed 23 October 2026 · Market cap ₹42,397 crore · PE 56.6

GrowthGuidance raisedTranscript read

Revenue: +144.6%; on a year ago
EBITDA: +529.5%; on a year ago
Profit to shareholders: +12825.0%; on a year ago
EBITDA margin: 32.1%; +12.0 pts on last quarter

Sterlite Technologies reported record Q2 FY27 revenue of INR 2,529 crore and operational EBITDA of INR 685 crore (27.1% margin), aided by strong demand from AI data center builds and hyperscalers. The company raised its FY29 Lakshya EBITDA margin guidance to ~30% on the back of an order backlog reaching INR 35,274 crore and an optical attach rate of 24%. However, reported earnings were bolstered by a one-off INR 161 crore US tariff refund, while cash flows faced headwinds from expanding working capital and an unresolved $101.25 million legal judgment in the US.

Sterlite Technologies Limited, Q2 FY27₹ crore, consolidated

	Q2 FY27	Q1 FY27	vs previous quarter	Q2 FY26	vs a year ago
Revenue	2,529	1,910	+32.4%	1,034	+144.6%
Operating profit (EBIT)	703	300	+134.3%	49	+1334.7%
Operating margin	27.8%	15.7%	+1209 bps	4.7%	+2306 bps
Other income	34	12	+183.3%	12	+183.3%
Exceptional items	0	0	–	0	–
Profit before exceptional items and tax	674	257	+162.3%	6	+11133.3%
Profit to shareholders	517	197	+162.4%	4	+12825.0%
Earnings per share (₹)	10.32	4.03	+156.1%	0.08	+12800.0%

Source: Sterlite Technologies Limited’s filing to NSE, 23 October 2026. Operating profit is revenue less every expense except interest, so it leaves out other income and exceptional items. n.m.: not meaningful, because the earlier figure was zero or negative, or the latest one is a loss.

What stood out

Record open order book and large multi-year hyperscaler wins provide multi-year revenue visibility
Source
Open order book expanded to INR 35,274 crore (up 4.6x from INR 7,687 crore at FY26 end), driven by H1 FY27 order intake of INR 32,026 crore, which included a new 5-year, $1.2 billion (~INR 11,500 crore) hyperscaler deal and a prior $1.11 billion award letter (Presentation Slide 15, 24; Concall Page 5).
One-time US tariff refund contributed INR 161 crore to reported Q2 FY27 EBITDA and PAT
Source
Reported EBITDA of INR 846 crore includes a one-off net gain of INR 161 crore from a US import tariff refund received under IEEPA; operational EBITDA stood at INR 685 crore (27.1% margin) (Financial Results Note 11; Concall Page 7).
Reported net debt-free status and cash reserves boosted by a INR 1,500 crore QIP, but part of cash is legally restricted
Source
Cash and cash equivalents plus bank balances stood at INR 703 crore following a INR 1,500 crore QIP allotment on July 1, 2026, but ~INR 396 crore ($41.53 million) is deposited as a bond for the ongoing US litigation appeal (Presentation Slide 25, Financial Results Note 3, 6).

Guidance

Metric	Guidance	Period
FY29 EBITDA Margin Target (Project Lakshya) Source Presentation Slide 26; Concall Page 8	Upgraded to ~30% (from >27% earlier)	FY29
FY29 Revenue Target (Project Lakshya) Source Presentation Slide 26; Concall Page 8	Maintained at INR 20,000 crore	FY29
Data Center Segment Share of Revenue Source Concall Page 7, 14	~50% of total revenue in FY27	FY27
Capital Expenditure Source Concall Page 3, 8	~INR 1,000 crore per year	FY27–FY29
R&D Expenditure Source Concall Page 3, 14	~2% of annual revenue	Annual

Upgraded FY29 Lakshya EBITDA margin target from >27% to >30%, while maintaining the INR 20,000 crore revenue target.

Tailwinds

Rapid revenue mix shift toward higher-margin AI data center solutions
Source
Data center segment contributed 33% of revenues in H1 FY27, tracking towards management's goal of 50% in FY27, driven by surging fiber density requirements in GPU architectures (Concall Page 4, 7).
Increase in optical connectivity attach rate and market share
Source
Optical connectivity attach rate reached an all-time high of 24% in H1 FY27 (up from 20% in H1 FY26), and global ex-China OFC market share rose to 9% from 7% (Presentation Slide 16; Concall Page 5).
Operational margin expansion driven by capacity utilization and product mix
Source
Operational EBITDA margin expanded 624 bps QoQ to 27.1% in Q2 FY27 (INR 685 crore), supported by higher factory utilization and a richer high-end product mix (Presentation Slide 22; Concall Page 7).

Headwinds

Working capital elongation and sharp surge in receivables
Source
Consolidated trade receivables rose from INR 1,066 crore at March 31, 2026 to INR 1,606 crore at September 30, 2026, leading to negative working capital adjustments of INR 441 crore in H1 FY27 cash flows (Cash Flow Statement Page 4; Balance Sheet Page 3).
Compressed payable days owing to tight raw material supply terms
Source
Management indicated that payable days fell as material suppliers altered payment terms amid a supply-constrained environment for inputs like germanium and helium (Concall Page 13).
Higher finance costs due to loan prepayment penalties
Source
Finance costs increased to INR 63 crore in Q2 FY27 (vs. INR 55 crore in Q2 FY26) despite gross debt reduction, driven by prepayment penalties incurred while extinguishing term loans (Concall Page 10; P&L Page 1).

New businesses and products

capacity expansion · Under execution (FY27 to FY29)

Capacity expansion across optical preform, fiber, cable, and preterm connectivity

Expected benefit: Expand existing preform, fiber, and cable capacity by 50% and construct a greenfield facility to scale termination capability and meet AI DC demand
Risks: Raw material procurement constraints (germanium, helium) and execution delays
Timeline: FY27-FY29
Investment: INR 1,000 crore annual capex commitment through FY29

Source

Concall Page 3, 8; Presentation Slide 7

new product · Launched in September 2026

Neuralis Pre-Terminated Trunk Assemblies and Plenum-rated Fiber Trunks

Expected benefit: Plug-and-play high-density optical solutions (48F–6,912F) for hyperscale AI data halls, accelerating customer deployment and improving attach rates
Risks: Industry adoption cycles and installation/maintenance complexity
Timeline: Commercialized in Q2 FY27
Investment: Funded within annual R&D spend of ~2% of revenue

Source

Presentation Slide 18; Concall Page 6

new product · Commercial pilot phase for HCF; field-tested/trials underway for MCF

Hollow-Core Fiber (HCF) and Multi-Core Fiber (MCF)

Expected benefit: Offers 30–47% lower latency (HCF) and 4x–7x data capacity expansion within the same cable footprint (MCF)
Risks: Manufacturing difficulties and industry-wide installation/maintenance challenges; scale expected in 1.5–2 years
Timeline: Scale-up expected in 1.5 to 2 years
Investment: Part of ongoing R&D expenditure

Source

Concall Page 6, 12–13; Presentation Slide 19

Things to check

Profit grew far faster than operating profit: other income, tax or one-offs did some of the work
Revenue up over 60%: check for an acquisition or a weak year-ago quarter
Material legal liability: US court confirmed $101.25 million verdict against STI
Source
On August 29, 2025, the US District Court confirmed a $101.25 million judgment (including fees) against US subsidiary STI in favor of Prysmian. While STI appealed and deposited a $41.53 million bond (~INR 396 crore restricted cash), the ultimate financial liability remains undetermined (Financial Results Note 6; Auditor Review Report Page 2).
Impairment of subsidiary assets and accelerated depreciation
Source
The company recorded an impairment charge of INR 22 crore in consolidated results (and INR 16 crore in standalone) on property, plant and equipment, along with an impairment to square off subsidiary Speedon Networks in full (Financial Results Note 10; Concall Page 10).
Substantial working capital drain alongside high revenue growth
Source
H1 FY27 saw an operating cash outflow impact of INR 441 crore from working capital changes, largely driven by a INR 568 crore jump in current trade receivables (Consolidated Cash Flow Statement Page 4).

How the call went

The call featured confident statements regarding multi-year hyperscaler demand and margin targets, but management routinely deflected detailed questions regarding pricing, exact capacity utilization rates, and product-level margins.

Specific or vague: Management provided detailed updates on high-level market CAGR, order totals, and product rollouts, but refused specific figures on fiber pricing, capacity utilization, and segmented revenue splits.
Candour: Fair on operational context, acknowledging working capital pressure and raw material constraints, but did not discuss the Prysmian legal judgment voluntarily during the call.
The hard questions: Analysts probed on sustainability of AI capex, Hollow-Core commercialization timelines, receivables increase, finance cost increase despite debt repayment, and pricing trends.

What analysts pressed on

Drivers of margin guidance upgrade without a revenue target raise
Reasons behind the YoY rise in finance costs despite debt prepayment
Sharp compression of trade payable days and increase in receivables
Commercialization feasibility and timeline for Hollow-Core and Multi-Core fiber
Potential project delays among US hyperscalers impacting order book delivery

Answers that sidestepped

Declined to share specific pricing trends for preform and fiber, answering with product mix comments instead (Concall Page 9).
Refused to state the exact revenue contribution of DC fiber and DC attach rates, citing competitive reasons (Concall Page 10).
Declined to share precise plant capacity utilization percentages for the quarter (Concall Page 13).

Numbers against the story

Management emphasized strong organic profitability and achieving a net debt-free balance sheet with INR 703 crore net cash. However, reported EBITDA of INR 846 crore and PAT of INR 517 crore were meaningfully assisted by a one-off INR 161 crore US tariff refund. Furthermore, the net cash position was created by a INR 1,500 crore QIP rather than pure operating cash flow, and ~INR 396 crore ($41.53 million) of the cash is restricted as a court bond for the Prysmian trade secret lawsuit appeal.

Sources

Concall transcript · filed 27-Oct-2026
Investor presentation · filed Oct
Figures: the company’s results filing with NSE, linked under the table.

Notes written by gemini-3.8-flash from the documents above on 1 November 2026. They summarise what the company said and can contain mistakes: check the source passage before relying on a point. Not investment advice.