BENGALURU (Reuters) – Indian networking solutions provider Sterlite Technologies Ltd swung to a fourth-quarter profit on Wednesday, aided by strong growth in its mainstay optical networking business.
The company’s consolidated net profit stood at 650 million rupees ($8 million) for the quarter ended March 2023, compared to a net loss of 220 million rupees a year ago, it said in an exchange filing.
The profit, spurred by rising cable demand, comes at a time when 5G rollouts in the country pick up pace, with top telecom players like Bharti Airtel Ltd and Reliance Industries Ltd’s Jio Infocomm posting growing 5G user numbers.
Sterlite provides end-to-end data connectivity solutions, manufactures optical fibers, and provides infrastructure for cable and mobile networks including 5G. Its clients include Bharti Airtel, UK’s Netomnia and Australia’s Vocus Group.
Consolidated revenue from operations jumped 25% to 18.72 billion rupees, the company said.
Optical networking business, which contributed a hefty 80% of the company’s topline, grew 40% to 15.05 billion rupees.
“The industry continues to show significant long-term growth,” said Managing Director Ankit Agarwal.
The company also said that its board of directors have approved demerger of its global services business arm into a to-be-listed unit named STL Networks.
Sterlite said that the rationale behind the demerger was to “pursue growth opportunities without capital constraint.”
Additionally, the company declared a final dividend of 1 rupee per share and approved fundraise of up to 10 billion rupees.
Shares of Sterlite jumped up as much as 6.5% after the results.
($1 = 81.7800 Indian rupees)
(Reporting by Hritam Mukherjee in Bengaluru; Editing by Varun H K)
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