Sterlite Technologies Targets 18-20% EBITDA Margin in FY26
Optical fibre and connectivity solutions provider Sterlite Technologies is optimistic about achieving an EBITDA margin of 18-20% in FY26, backed by its efforts to enhance capacity utilisation.
According to Sterlite Technologies’ Managing Director, Ankit Agarwal, the company aims to take its factory utilisation from the current 45-50% to over 70% by the third or fourth quarter of the current financial year.
“If you look at our numbers, from two to three years ago, when we have broadly run our factories at 70% utilisation, we moved towards that 18-20% EBITDA margin from currently around 13-14%,” Agarwal said during a conversation with NDTV Profit.
We want to take this from about 45-50% utilisation towards 70% plus utilisation. Probably towards quarter three, quarter four this year,” he added.
Data Centers: A Critical Growth Area
Agarwal identified data centers as a critical growth area, with India’s data center capacity projected to triple from one gigawatt to three gigawatts by 2030. Sterlite Technologies has launched a dedicated portfolio for this segment and is already in talks with major data center players in India.
“Our focused markets continue to be the US, Europe and India. In India, we do expect some growth on the back of BharatNet Phase 3. Important to appreciate that India is less than 5% of the world’s optical market. Major impact on our bottom line comes from Europe and the US markets,” Agarwal noted.
Debt Reduction and Partnership Opportunities
On the financial front, Sterlite Technologies is focused on reducing its debt, having completed most of its capital expenditure in recent years. Agarwal reiterated the company’s target to bring its net debt-to-EBITDA ratio down to two times by the end of the year.
When asked about potential partnerships with Starlink, Agarwal opened up about the possible areas of collaboration.
“If there is an option to partner with them on some of the connectivity requirements from the satellite, from the link at the home into the house, I think those are areas we could look to partner with them,” the MD said.
Conclusion
Sterlite Technologies is poised to achieve its EBITDA margin target of 18-20% in FY26, driven by its efforts to enhance capacity utilisation and a focus on data centers. The company’s debt reduction strategy and potential partnership opportunities with Starlink are also expected to boost its financial performance. Investors and traders can keep an eye on the company’s quarterly results and corporate actions for further updates.