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Sterlite Technologies slips 6% as profit falls 38% in December quarter

In Q3FY20, Sterlite underperformed the benchmarks by slipping 21.6 per cent as compared to Nifty's 7.11 per cent gain

SI Reporter  |  New Delhi 

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Shares of Sterlite Technologies slid 6 per cent to Rs 122 on the BSE on Thursday after the company's profit plunged 38 per cent in December quarter (Q3FY20) to Rs 91 crore, due to lower operational income. The telecom services company had registered a net profit of Rs 146 crore during the same quarter last fiscal.

The consolidated revenue declined 9.9 per cent at Rs 1,203 crore during the quarter as against Rs 1,335 crore in the corresponding quarter of 2018-19. The company's exceptional items stood at Rs 51 crore in the third quarter of 2019-20.

Ebitda (earnings before interest, taxes, depreciation, and amortization) margin declined from 22.8 per cent to 20.5 per cent during the quarter. The management attributed fall in margin to volume and realisation decline in optical fibre. The global telco capex had paused because of 4G to 5G transition as seen in similar transitions in the past.

"During the quarter, the company made an application under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) for settlement of disputed excise matter of Rs 188 crore demanded by CESTAT in 2005-06, which the company was contesting in Supreme Court, and also some other litigations which were pending as of June 30, 2019", Sterlite Technologies said in notes to accounts.

Based on the provisions of SVLDRS, the management has determined the duty payable in respect of all matters offered for settlement under the scheme and accordingly, made an additional provision Rs 50.71 crore in the current quarter, the company said.

STL Group CEO Anand Agarwal said the market environment in 2019 witnessed uncertainty and sluggish growth on account of the economic downturn.

"Within this business environment globally, we increased our order book over the last quarter and have shown a 21 per cent revenue growth (9-months year to date) as compared to last year. The company's transformation from an optical fibre company to an end-to-end data networks integrator has significantly increased its overall addressable market," Agarwal said.

The filing said the company continues to grow its healthy order book of Rs 8,535 crore with a strong growth outlook.

At 10:13 am, the stock was trading 4.3 per cent lower to Rs 125.70 as compared to 0.26 per cent gain in the Nifty50 index. A total of 19.8 lakh shares have changed hands on the NSE and BSE so far. In Q3FY20, Sterlite underperformed the benchmarks by slipping 21.6 per cent as compared to Nifty's 7.11 per cent gain in the same period.

First Published: Thu, January 16 2020. 10:20 IST
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