The continuing strong demand for optic fibre and cable has enabled Sterlite Optical Technologies Ltd. (SOTL) to report a topline growth of 40%. Optic fibre and cables grew by 192% and contributed 62% to the turnover as compared to 30% in the corrseponding quarter of the previous year.
Consequently, jelly filled telecom cables (JFTC) contributed 38% to the turnonver. With overall growth at 40%, JFTC is expected to have reported a sizeable negative growth in sales estimated at 200%. For the half year ended December '00 the company has reported an even stronger growth rate of 46%.
Export sales of the company have registered meteoric growth rates increasing from Rs 18.2 m to Rs 1,230.5 m in the current quarter. However, its domestic sales have fallen by 12.5%. This could be due to the continuing trend of DoT and MTNL reducing their purchase of JFTC. Nevertheless, growth in the optic fibre (OF) and cable (OFC) space continues to remain robust. Globally, the OF business is estimated to grow at a compounded rate (CAGR) of 27% till 2004. Meanwhile, OFC sales are anticipated to double over this period.
Operating Profit (EBDIT)
Operating Profit Margin (%)
Profit before Tax
Profit after Tax/(Loss)
Net profit margin (%)
No. of Shares (eoy) (m)
Diluted earnings per share*
P / E ratio
Due to the strong demand in OF and OFC and the consequent firming up of prices (approximately $65 / fibre Km) the company has been able to report a significant rise in operating profits. With realisations improving the OPM of the company has also increased impressively by 650 basis points.
The interest cost of the company has declined substantially. This could be due to the strong cash flows enjoyed by the company, which have been utilised to repay debt. Consequently, pre-tax profits have risen by 113% but the incidence of tax in the current year has pulled down post-tax profit growth to 101%.
At Rs 879 the company is trading at an attractive valuation of 13.7x 2QFY01 annualised earnings while it enjoys a bottomline growth of 100%. Consequently, its PEG ratio is quite favourable.
More Views on News
Sorry! There are no related views on news for this company/sector.
LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India. Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: email@example.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407