Thank you. Good day, everyone, and welcome to STL's Q1 FY '27 earnings call.

To take us through the results and answer your questions today, we have with us STL's senior management represented by Mr. Ankit Agarwal, Managing Director, and Mr.

Ajay Jhanjhari, Group CFO. Before we proceed with the call, let me remind you that the discussion today may contain forward-looking statements that may involve known or unknown risks, uncertainties, and other factors.

It must be viewed in conjunction with our business risks that could cause future results, performance, or achievements to differ significantly from what is expressed or implied in such forward-looking statements. Please note that we have uploaded the results and earning call presentation on STL's website, and the same is available on the stock exchanges.

We'll start the call with a brief overview of the quarter gone past and then conduct the Q&A session. With that said, I will now hand over the call to our Managing Director, Mr.

Ankit Agarwal.

Thank you, Rahul. Good day, everyone.

Thank you for joining STL's Q1 FY '27 earnings call. I'll begin by highlighting the key takeaways from our investor presentation, and then Ajay will walk through the financials.

STL is a global leader in digital connectivity infrastructure, serving data centers, telcos, citizen networks, and large enterprises. Our optical connectivity solutions spans fiber to fiber cables, specialty cables, and connectivity solutions.

We're India's number one end-to-end optical manufacturer, with 9% optical cable market share outside of China. With over 30 years of leadership, more than 785 patents, and 10-plus zero-waste-to-manufacturing facilities worldwide, STL is leading the next wave of global digital infrastructure.

At STL, we are amongst the very few companies in the world to have mastered the journey from glass to gigabit. It starts with the purest grade of silicon, which we transform through advanced processes like silicon tetrachloride formation, chemical vapor deposition, and high-precision sintering to create ultra-pure glass preforms, which is the backbone of optical fiber.

From there, we draw the highest-grade fiber, design high-density cables, and develop reliable connectivity products that power data centers and telecom networks worldwide. This full-stack integration right from raw material to network deployment gives STL a unique edge in quality, cost efficiency, and innovation across the connectivity value chain.

This deep integration enables us to engineer next-generation fiber, cable, and connectivity solutions that are redefining global connectivity. Our end-to-end innovation, from material science to smart optical systems, help global network builders create faster, denser, and more reliable networks for the AI era.

As we step into FY '27, our core strategic priorities have evolved and are delivering tangible results. Beyond driving market share and attach rates in our core optical business, we are actively pivoting towards increasing our revenue share from integrated connectivity solutions in partnership with key customers.

With data centers emerging as a critical growth engine for the entire industry, we're sharply focused on scaling the segment under pinned with our continued technology leadership. This commercial momentum, paired with our disciplined focus on operation and cost efficiencies, will drive margin expansion as we head into the rest of the fiscal year.

Moving on, we'll now speak about the industry tailwinds and the growing market opportunity. As you all know, we're at the intersection of three powerful multi-year investment cycles: FTTx, data centers, and 5G/6G networks, creating a strong structural tailwind for optical infrastructure.

FTTx is accelerating globally, with deployments rising from 151 million fiber kilometers in 2025 to about 171 million fiber kilometers by 2030. In the US alone, more than 140 million homes will be served by fiber by 2030, supported by large government programs like BEAD in the US and BharatNet in India.

Data centers are the fastest-growing driver of fiber demand. CRU projects a massive 63% global growth in optical cable demand from this segment in the year 2026 alone, driven by hyperscale expansion and AI workloads.

North America installed DC capacity is expected to double from 63 GW in 2025 to 126 GW by 2030. Morgan Stanley investment bank has again upgraded their forecast on hyperscaler CapEx from $765 billion to $805 billion, increasing the TAM of our optical connectivity.

Concurrently, the scaling of 5G/6G networks demand deep network densification, with global 5G subscriptions expected to hit 6.4 billion by 2030. India's 5G subscriptions expected to hit 1.1 billion by 2031, and then the global 6G subscriptions forecasted to cross 180 million by the end of 2031, which is about four to five years away.

Together, these three cycles are creating a structural multi-year tailwind for fiber and connectivity solutions, positioning STL at the center of the next global digital infrastructure buildout. Next on slide 10, you will see how some of the big global telecom and technology giants are aligned in backing optical fiber as the base of digital future across 6G, broadband, data centers, and the AI infrastructure.

The takeaway is simple: fiber remains as the core backbone of all the digital infrastructure coming up. Moving on to slide 11, it shows how the AI revolution and rapid data center expansion are creating a once-in-a-generation opportunity for optical connectivity.

As per McKinsey, a consulting firm, by 2030, 70% of data center demand will be AI-led, driving a sharp increase in CapEx and infrastructure intensity. GPU architectures are rapidly shifting from 400 gig to 800 gig and going all the way to 1.6 TB speeds, where copper reaches a bandwidth threshold and fiber becomes even more essential, increasing our TAM by $10 billion for optical connectivity.

Simultaneously, AI workloads are creating dense fiber interconnections, significantly increasing fiber per rack. Every new data center added exponentially multiplies this demand.

This is not just a matter of scale; it's a step change in fiber intensity. With STL's Neuralis end-to-end AI DC portfolio, STL is uniquely positioned to capture this multi-year structural growth opportunity.

Coming to India's data center environment, data center expansion here in India is emerging as one of the most compelling structural tailwinds for optical fiber. Installed capacity is set to grow almost seven-fold, expanding from 1.6 GW currently to almost 10 GW by 2031, as per Morgan Stanley.

What makes this investment cycle particularly powerful is a breadth of commitment going from hyperscalers like Google, Meta, and Microsoft, which are deploying tens of billions of dollars on their side. We also have the Indian conglomerates like the of TCS, Adani, and Reliance laying out long-term capacity plans.

Over the last quarter itself, we have seen new announcements coming from the likes of Meta and Reliance with their massive gigawatt deployment plans in India. We've also seen Australia's AirTrunk coming in with almost again a multi-billion-dollar commitment in Maharashtra and Andhra Pradesh to build close to 5 GW of data center capacity.

A supportive policy environment, state incentives, tax incentives, power availability, and the tax holidays that are extended up to 2047 are further de-risking and accelerating the buildout in India. Every dollar of data center CapEx has a direct multiplier on fiber intensity across DCI, metro, and long-haul networks.

With optical cable demand projected to grow at 11% CAGR through 2030, this is not a cyclical uptick, but a durable, high-visibility growth opportunity playing out in our home market in India. As per CRU, the global cable demand market for this year has strengthened significantly and is projected to accelerate to 8.2% year-on-year, led mainly by North America's data center buildout and improving execution in India.

Importantly, demand is now consistently out-pacing domestic supply in North America, and on the lead times are continuously getting tight. Looking ahead, North America is set to be the main growth engine powered by AI-led data centers, data center interconnect builds, and continued FTTx expansion.

CRU expects to deliver the strongest regional CAGR of 18.6% between now and 2030, a major upgrade against earlier forecast of 15% CAGR. Overall, this points to sustained multi-year upcycle in fiber demand, with North America and APAC ex-China, which are all core focus areas for STL, which are driving growth.

We are also seeing positive momentum in India, Southeast Asia, and parts of Europe, which are closely aligned with our strategy. We are successfully seizing new market opportunities, a trend that is clearly demonstrated by record-breaking order intake this quarter.

In quarter one alone, we secured orders worth ₹13,100 crores, which is 1.7 times the total order wins of ₹7,687 crores recorded in the entire financial year last year. The momentum is anchored by a landmark multi-year $1.1 billion deal with a global hyperscaler to supply optical connectivity products for next-gen AI data centers through FY '29.

Furthermore, we secured multiple $100 million hyperscaler orders for our high-fiber-count IBR cable solutions. Alongside these hyperscaler wins, we also expanded our footprint in long-haul applications by securing a strategic order with a major connectivity infrastructure provider.

Importantly, our order book today is well-diversified, reflecting a healthy mix of order intakes from all customer segments and product categories across regions. Innovation continues to be a key differentiator for STL.

This quarter, we made significant technology strides to power the AI and hyperscale data center era, more of which you will see in the coming slides. Building on the momentum of Neuralis, our flagship AI-era data center portfolio, we achieved US Conec certification for delivering MMC pre-terminated solutions to hyperscale customers.

Crucially, we are pleased to share that we have secured definitive victory in a European patent dispute with Fujikura, and this matter has now been conclusively resolved in STL's favor. This effectively brings the UK litigation related to our Celesta cable family to a close.

This removes all legal uncertainty around these products and fully covers the path for our data center and telecom business. Our product development engine was also highly active this quarter.

In optical connectivity, we launched ConfiX, our spliceless plug-and-play solution designed for dramatically lowering the FTTx installation costs. Our innovative engine is backed by a deep IP portfolio of more than 785 patents, with nine new filings this quarter, and we've been recognized through multiple global awards.

Overall, these advancements reinforce our position as a technology leader, building future-ready capabilities and aligned closely with our AI, cloud, and high-performance network demands. Turning to our product portfolio, we're making tremendous progress with Neuralis, our purpose-built portfolio for the AI era of data centers, which addresses two mission-critical needs: AI white space connectivity and high-speed DCI, where fiber density, speed, and simplicity matter the most.

A major milestone this quarter is that we have achieved the elite US Conec certification of 4 MMC pre-terminated solutions, delivering a massive 3 times increase in cable density over traditional layouts to support high-density AI workloads. With this certification, STL becomes one of the few global players offering certified MMC pre-terminated fiber trunks, array cords, and assemblies, significantly strengthening our portfolio and directly addressing cable congestion for hyperscalers scaling to 800 gig and beyond.

By leveraging STL's fully-integrated integration, Neuralis enables faster deployment and massive GPU clustering. It reduces deployment complexity and accelerates the time to service.

Supported by our local manufacturing facility in South Carolina, this launch strengthens our position in the US with the both hyperscalers as well as the upcoming neo-cloud providers. Slide 18 highlights STL's leadership in the next-generation optical fiber portfolio.

It directly addresses the optical physics demands of the AI DC era through three flagship technologies: firstly, our G.654.E fiber, now fully commercialized and delivers 30% lower signal loss; second, hollow-core fiber, which cuts latency by up to 47% to accelerate AI data center interconnect; and finally, our award-winning multicore fiber, which expands our data capacity between four to seven times with the same footprint. With the successful real-world deployments of multicore fiber already underway in India and the UK alongside partners like C-DOT, IIT Madras, and Colt in the UK, this firmly positions STL to power the high-density, ultra-low latency infrastructure required for tomorrow's AI workloads.

Moving to market-led innovation, ConfiX is redefining US FTTx deployment economics for new builds, expansions, and overbuilds. By shifting fiber preparation to controlled factory environments, its true plug-and-play modular MPO to LC architecture enables completely spliceless installation.

This slashes labor costs by up to 71% and by eliminating the field splicing and reducing reliance on skilled labor. Already field-validated with top-tier US telecom operator and recognized by the Lightwave Innovation Awards, ConfiX delivers faster time to revenue with significantly fewer truck rolls and lower operational risk.

Strategically scaling ConfiX allows us to drive higher attach rates for optical connectivity with our fiber cables, expanding our revenue and deepening our margin profile with key US customers. On market position and attach rate trends, our global ex-China OFC market share increased to 9%, demonstrating our resilient execution and steady market expansion despite broader environmental challenges.

On optical connectivity, we're pleased to share that our attach rates have increased to 16% on a much larger OFC revenue base compared to 15% last year. The long-term opportunity in connectivity remains robust as our portfolio expands, and we continue to successfully pivot towards selling higher-value integrated solutions rather than standalone products.

Looking ahead, we are focused on further increasing our attach rate to above 20% from next quarter onwards and to 25% by the end of this financial year. Taken together, this shows that our core OFC business remains solid and our attach-led growth strategy gaining clear traction in coming quarters.

Now, I'll hand over to our CFO, Ajay, to take you through the financials.

Thank you, Ankit, and thanks to everyone for joining us today. I am happy to take you through our financial highlights for Q1 FY '27, a truly historic quarter where STL delivered its highest-ever performance across revenue, EBITDA, and PAT.

Revenue reached ₹1,910 crore, representing an extraordinary 87% year-on-year growth. On profitability, having previously guided for a 20% EBITDA margin by the end of FY '27, I'm proud to share that we delivered on this right here in Q1 with ₹397 crore in EBITDA, which is up 184% year-on-year.

We are now revising our EBITDA margin guidance upward to 23%. Finally, PAT came in at a record ₹197 crore, reaching 10% of revenue, our highest PAT margin ever, which represents a massive 3.5 times expansion over full year of FY '26 PAT.

Overall, this performance reflects our unwavering focus on disciplined growth, margin expansion, and stronger bottom-line outcomes as we enter the new financial year. On the segment side, while telecom and citizen networks continue to be a core pillar, our data center segment saw strong growth, contributing 21% this quarter, up from 1% in FY '26.

Looking ahead, we expect the combined data center and enterprise segment to scale up to 50% of the revenues in the current fiscal, well above the 30% guidance provided in our previous earning call. From a geographic standpoint, our revenue mix continues to reflect strong global momentum.

North America's share expanded significantly to 54% in the current quarter, up from 39% in FY '26, driven by robust demand. Europe contributed 25%, while the rest of the world held steady at 22%.

This balanced regional footprint reduces concentration risk and positions us well to capture growth across key global markets. Moving to the open order book, we have seen strong momentum this fiscal.

Our open order book stands at a record high of ₹18,618 crore, up 2.4 times from the last quarter, reflecting healthy order inflows and a strong market confidence. Of this, ₹2,228 crores are slated for execution in Q2 of FY '27, while the remaining ₹16,390 crore is scheduled for execution over Q3 FY '27 and beyond.

This robust order pipeline provides strong revenue visibility and reinforces our growth outlook for the year. On slide 26, we have shared an abridged snapshot of our reported numbers for your reference.

On balance sheet, the net cash balance stands at ₹483 crore, achieving the status of net-debt-free company. Additionally, I'm glad to share that strengthened balance sheet position is now reflected through CRISIL's revised rating outlook to Stable and ICRA upgraded the rating to AA Stable.

Moving on to our capital structure, STL successfully completed a landmark QIP of ₹1,500 crore to fund our next phase of growth. The issue received strong market reception, with the book being subscribed more than 2.5 times, strengthening our institutional holdings to a fresh historic high of 33%.

We witnessed robust participation from leading domestic and global institutional investors, including marquee names such as Nomura, HSBC, Motilal Oswal, and Bank of India, among others. We are allocating 75% of proceeds towards reduction of debt, while the rest of it going towards general corporate purposes.

This successful capital raise significantly strengthens our financial foundation as we execute our long-term roadmap. With this, now I hand it over back to Ankit for updates on our social responsibility initiatives and closing remarks.

Thanks, Ajay. STL CSR initiatives continue to create deep, lasting, and measurable impact across healthcare, education, women empowerment, and environmental sustainability.

In education, the Indian CSR award winner Robo Shiksha program has scaled to over 12 schools and 10,000 students, equipping them in next-gen robotic skills. In women empowerment, our Jeevan Jyoti initiative has trained over 6,500 women in vocational skills.

We remain firmly committed to driving sustainable growth and building future-ready communities. Our flagship healthcare program, Swasthya Samruddhi, has now impacted 27 lakh lives across Maharashtra and expanded its footprint into Silvassa.

At STL, sustainability is central to our purpose, and we're proud to hold a Sustainalytics A rating and are committed to achieving net-zero emissions by 2030. Our strategy is built on three pillars: environmental sustainability—since FY '19, we have diverted 2.86 lakh metric tons of waste, recycled almost 11.6 million cubic meters of water, and reduced over 45,600 metric tons of carbon dioxide equivalent through energy efficiency.

Over 32% of our procurement is local, and our partnership with Hygenco for advanced green hydrogen and oxygen plant has been commissioned and successfully started supply. We're also actively looking at enabling all our operating footprints to be sourcing green energy.

In terms of social responsibility, we're aligned with the 16 United Nations SDGs, and we've positively impacted more than 920,000 lives through education, women empowerment, and healthcare alongside installing 4,500 kW of solar capacity. Strong governance: with the two Big Four auditors and robust governance committees, we've earned 100-plus ESG awards since FY '19.

Notably, STL is the world's first optical fiber manufacturer certified for Zero Liquid Discharge and Zero Waste to Landfill, setting a true industry benchmark globally. Let me close with our focus areas.

Our goal is to keep driving technology and cost leadership, drive sales of integrated connectivity solutions in partnership with key customers, and scale our data center business to strengthen our role as a key enabler of global digital infrastructure. With this, I will close my opening remarks and hand over to the operator to open the floor for questions.

Thank you.

Yeah. Good afternoon.

Thank you for the opportunity. Congratulations for excellent earnings.

My first question is if you could talk about what was the capacity utilization in first quarter? In terms of the order inflow, if you could talk about the ordering, whether it is US or Europe, are we at the fag end of the ordering or it's still work in progress?

How do you see that given the big numbers what we hear about the data center CapEx, are those ordering behind us or it's still yet to happen in a meaningful fashion?

Yeah. Thank you, Achal.

I think both parts, when we look at the capacity utilizations, we don't share, we don't disclose actual numbers. As we've been sharing over the past few quarters, we continue to see that our capacity utilization is is improving quarter-on-quarter.

That's that's a positive development, and we continue to see that going forward as well. In terms of our order inflow, yes, we're, we're proud and happy with the orders that we've received, the, the connections with our customers, and we continue to feel positive about, future orders as well, both on the telecom sector as well as on the data center and enterprise segment.

Ankit, the question was in terms of the ordering, while you have given a very qualitative answer, but I'm just curious to know, typically, the cables are required during the execution of that data center. Is the ordering been through, or it's probably not even midway through?

At the industry level.

From a data center CapEx, if you just look at the hyperscalers as well as the neo-clouds, many of them are basically talking about multi-year investment in the data center capacity buildout. Just if you take US itself, probably 8 GW to 10 GW will happen this year and further, there's in fact a backlog of data center capacities that need to get built out.

We do continue to see that this CapEx will continue from the hyperscalers. On the back of that, the demand for our portfolio will continue to increase.

Got it. Another question I had with respect to the sourcing of raw materials, particularly the rare earth materials.

If you could talk a little bit where are we in that journey? Have we got the visibility for next few years, few quarters?

If you could clarify on that as well. Yeah.

I think there are three or four elements out here. One is germanium, which is used in a glass process.

We have helium, which is required as part of some of our fiber manufacturing. Then we have other elements like polyethylene and others, which are linked to oil prices, etc.

From the areas we've been speaking about, I would say germanium, we continue to put consistent efforts both on looking at areas of sourcing, and we continue to believe that that will improve quarter-on-quarter. At the same time, we're also looking at new technologies where our consumption of germanium itself could reduce over time.

That's something that's work in progress over the next few quarters. We'll update on that.

When it comes to helium as well, we are watching that very closely with the developments in Middle East. We have worked on some technologies where we're able to recycle some of our requirements.

From that perspective, we are well-positioned. From a polyethylene perspective, yes, the prices have been fluctuating.

Largely, that ultimately is a cost for us at the cable level, and we feel fairly confident that up to a certain level that we're able to pass that on to our customers. Overall, I would say work in progress, and we do feel confident quarter-on-quarter it will improve.

Got it. Just a last question on the CapEx, if you could—

Thank you.

Hi, Ankit. Congratulations for a great set of numbers.

You haven't shared the capacity utilization numbers, but I'm just curious to know that given the quantum of CapEx in AI data centers, do you think we will have the capacity to take on a couple of more large orders if given the opportunity? If not, then are we looking at any capacity additions over the next couple of quarters?

That would be all from my side. Thank you.

Yeah.

Hi, Dev. As I said, I think we're in several conversations in terms of conversations with telecom operators in India, in Europe, as well as globally.

At the same time, we are looking very closely at both upgrades of our equipment and machines, and we're also looking at debottlenecking from our current operations. All of that is progressing as we would like.

Both things are happening in parallel, Dev. We're in the conversations as well, as well as we feel confident that with some of the upgrades as well as debottlenecking, we can look at further orders from here.

Perfect. Thank you so much.

Thank you.

Yeah. Congratulations on good number, and thanks for taking my questions.

My question relates to the executions which you had said will be done in the Q2. If we see last quarter, you said that you will be doing something around 1,500, but the execution has happened much larger.

Similar trend can happen in the coming period also? The execution for the whole year, if you can indicate anything on that?

Like you had given guidance for the margin, if anything you can indicate on the revenue?

Hi. Broadly, we don't give any guidance on the revenue.

The numbers which you are talking about is the order book, which was supposed to be executed in Q1 when we talked previously. Since then, there has been drastic improvement in the order intake, which is clearly visible on the revenue growth which you have seen.

On the Q2 numbers, similarly, we are reporting that the executable order book is ₹2,228 crore. That does not give any guidance on the revenue number.

Okay. Sir, second thing, if you can talk about order pipeline, if you can indicate anything in negotiations and all?

Sunil, historically, we've always been focused on having key accounts globally, both on telecom side and data center. That's our strategy.

We're not focused on the spot market, whether it is fiber or cable. We have very strong partnerships with customers in India.

We have BharatNet projects and others, which are very important to us. We continue to have very good discussions with our customers.

We continue to work on our product development for their future requirements as well as, particularly, with telecom customers and data center customers, we are looking and in discussions for their orders and their requirements for the coming years. That's all happening in parallel.

Okay. Great, sir.

Thank you very much.

Thank you so much for the opportunity, and congratulations on a very great set of numbers. A couple of questions, sir.

First question on just wanted to understand your view on if I look at the gross margins, they were somewhat stayed same, right, despite our mix from DC going, let's say, up compared to the last quarter. Just wanted to get your view on this.

Considering let's say DC would be having a higher margin even at the gross level, is it because of cost pressures at the raw material that got probably led to let's say a same margin? Otherwise, probably would the margin have been higher?

Given, let's say, we are targeting a higher proportion of share in DC to up to 30% on yearly basis, just wanted to get your view on gross margins moving forward as the mix towards DC shifts.

Tej, here on the gross margin, yes, there is some sort of pressure which is coming from the input cost, broadly with all the war situations, the prices of the raw material getting increased to significant multiples. We do see the improvement going forward, which will obviously be accounted in the EBITDA margins which we are talking about.

Got it. Got it.

Perfect. Sir, second question is, of course, there's been a record inflow of orders this quarter.

Let's say if I remove our long-term order of a billion dollar, we have a decent order intake. Just wanted to understand, if I remove that order, the inflow would be about, let's say, ₹3,000 crores, which was, let's say, last quarter around ₹7,000 to ₹8,000 crores, the regular business.

Was it a conscious decision on not, let's say, taking incremental business because of let's say a capacity constraint and probably we'll start looking to take more orders, the regular orders, once there's some debottlenecking? Is it a conscious choice or was it a regular order intake?

No.

Tej, broadly, in fact, even if we exclude this long order, there has been a sufficient order intake. Obviously, now we are in a situation wherein we have to pick and choose the orders basis the capacity availability.

That will play a role. In this quarter, there are many much orders beyond this significant order win.

Going forward, we'll keep on evaluating on the basis of our capability strategically. Got it.

Got it. Sir, on germanium, just wanted to understand, are we currently buying whole of the inventory on spot or we have some tied-up contracts which are, let's say, at a lower fixed price?

We can't comment a lot on the germanium for competitive reasons. As I've been sharing, we're clearly focused on looking at our sources and diversifying our sources, and we feel confident about improving our availability quarter-on-quarter.

Got it. Got it.

Sir, last question, after this debottlenecking and you're saying that that's continuous CapEx which is happening, just wanted to get your view on are we still looking for, let's say, once we have a decent capacity onboard, are we still looking for, let's say, in negotiations for a long-term order of, it's not of this size, but let's say a sizable order with some telcos or data centers going forward in this financial year?

I can't comment on any specific size. As I said, this is all happening in parallel.

We are doing the debottlenecking and upgrades of our capabilities across glass, fiber, cable, and connectivity. All of that's happening in parallel.

At the same time, we are in conversations with our current customers as well as some new customers in terms of their requirements.

Great, sir. If you could help us with the CapEx numbers for FY—

No problem. Thank you so much.

Hi. Thank you for taking my question.

Ankit, it's more of a strategic question on how you view this entire AI versus telecom mix for the business. Given the excitement around AI and there's obvious supply crunch in the industry, right, from a more long-term capacity standpoint, how do you think of the order book kind of from filling it more towards the traditional telecom customers where maybe the margin is low initially, but it gives us more long-term stability on the book versus your AI capacity, right, in terms of your capacity and order book?

If you could provide some clarity on how you're thinking about this long term.

Yeah. Absolutely.

I think that's absolutely spot-on. I would almost add one more element to that is effectively rural connectivity projects.

We have three or four parallel demand centers. One has been the historical telecom requirements, which also are continuing to grow in certain pockets and certainly in the US.

Then you've got the data center part, which we're all aware of, and that's continuing to grow both from the hyperscalers as well as neo-clouds. In fact, there is a middle ground between the two where the telecom operators or neutral fiber companies are also deploying long-haul fiber networks to ultimately serve or lease to the data centers.

They're interconnected in some way. Then you've got this third element of rural projects like BEAD, which is starting to kick off now in the US, which is five- to seven-year buildout.

Then you've got BharatNet in India, which is also a large three- to four-year buildout at least. We're very conscious of we're in this business to be long-term.

We know we've stated our ambitions to be top three in the world. With that, we're very clear that we want to have this balance of our customer base and our portfolio base.

We're very conscious of that. What we broadly see is that our data center and enterprise segment will go towards 50% overall, and probably we will have telecom and the rural connectivity projects like BharatNet and others as a balance.

Sir, just a follow-up on that. Let's say over the next three, five years, do you see this mix of 50% remaining constant, or do you think that as the size kind of goes up, it will automatically adjust back down?

No,

I think strategically, this is where we want to go. Of course, it can vary quarter-to-quarter.

Directionally, this is where we think is a good mix. I think we also need to be mindful that we're also looking to scale up our connectivity part in this, both on the telecom side as well as on the data center side.

We're continuously launching new products like the ConfiX and others that I spoke about, where we can improve our attach rate, and we're talking about by quarter four of this year getting to about 25%. Whether it's on cable capacity or on the connectivity, we're planning and doing our product development to serve all of these markets.

Good evening, sir. Thank you so much for the opportunity.

Sir, in the data center side, what is our current revenue share in Q1? Secondly, I looked at page number 11 on the PPT.

Earlier, we had developed Celesta up to 6,912 fibers per rack, but it's mentioned 12,000 fibers per rack, which around 72 GPU AI node. That has been developed or it's under development?

We are targeting 16,000 fibers also. If you could share on the realization point of view, not at the company levels, but at the industry level, how that price have been moved up?

Earlier, it's between $18 to $30 range. I'm trying to understand based on the complexities and based on the applications, how that realization have moved up on the industry level?

Thank you. Firstly, I think on the realization, we do not comment on our realization.

Broadly, we do have healthy mix of good realization from data center as well as the telecom side. That's something that we continue to have a mix of both types of customers.

I just want to clarify from a technical perspective, this is not reflective of the fiber count the cable itself. The number of fibers per switch.

It's just kind of trying to help you understand that as you move towards different GPU architecture, what is the amount of fibers per switch required. As you see that scale up, it's more just to help you understand that as the density increases, by nature of the work happening with NVIDIA and others, the amount of fiber per data center will continue to increase.

That's more just from an information perspective. Similarly, on the left side, when you look at fiber explosion in DCI, which is the data center interconnect, as you see more and more data center buildings per campus increase, you will see an exponential increase in the fiber for the data center interconnect.

That's just a messaging of both of these that we wanted to share.

Hello? Congratulations on a fantastic set of results, and thank you for the opportunity.

I have a couple of questions. This quarter one performance that we've seen, ₹1,900 crores and almost ₹400 crores EBITDA—

You are not audible properly, Akshat. What?

Should be much better now.

Yeah.

My question was that the Q1 performance that we've seen in terms of revenue and profitability, is it sustainable over the course of the rest of the year? Or should we—

Look, yeah, we don't guide any numbers for the full year or longer term. I can only reiterate what we've been guiding is that we do expect that our utilization levels will continue to improve.

We are in conversations and active discussions with customers to secure more orders, and we're continuing to invest in both our capacities through debottlenecking as well as through some of our product development. From our perspective, I think we are well-placed to grow, but we cannot give any specific guidance in terms of how much we'll grow from here.

Okay. Also, I just want to understand what is the kind of CapEx that we're going to do this year and probably next year?

Yeah. Broadly, what we see is that as a combination of our investments to upgrade all our equipment that I spoke about across glass, fiber, cable, and connectivity, as well as for our debottlenecking across our sites to improve our yields and output, we expect about ₹500 crores of investment per year for the next three years.

Cumulatively, around ₹1,500 crores is what we see over the three years.

Can you also share the breakup of revenue and EBITDA that used to fall the optical connectivity and the cable business?

No, we don't break that out.

Okay. No problem.

Thank you.

Thank you.

Yeah. Hi, team.

Actually, congratulations on a great execution. My first question was on the optical connectivity products.

I just wanted to understand are we into the manufacturing of the optical transceivers? If not, whether we plan to enter into that space?

How do you assess the product offerings that we have under optical connectivity versus the optical transceivers? A quick primer or explanation on this would be very helpful.

My second questions was on the margins. I see we have actually upgraded our margins.

Is it on the back of the increase in the pricing that we are seeing or because we have guided for the increased optical connectivity attach rate? That's why upgrade to the margins.

Thank you. That will be all from my side.

Yep.

I think there is some history here. We actually used to be in multiple businesses, including active components and many other things.

We've consciously chosen to exit, sell off, or shut down many businesses. We've also demerged our system integration business into a separate entity.

There's a very conscious choice to be very, very focused on the optical fiber, cable, connectivity side. That's where we are making sure that we're building the right product portfolio.

That's really our focus. We're not looking at the transceiver side or any other technologies.

Anything that's linked to our fiber optics, things like hollow-core, multicore, any of those elements or new types of fibers, those are all within our domain. New products like transceivers is not something that we're looking at currently.

In terms of the upgrade to the margins, I think it's the combination of two, three things. I think it is certainly some amount of improvement in our capacity utilization, a good product mix and customer mix, as well as from a product side, a good, healthy ratio of cable and connectivity together.

Hi, Ankit. Thanks for taking my call.

Great set of numbers. Congratulations on that.

Two questions: one, do we have a play in the semiconductor value chain at all, whether now or in the future? The second is you've spoken a lot about the American data center opportunity.

Can you speak a little bit about the Chinese opportunity or rather the investment in data centers in China? Why I ask that question is because we hear that the cost of tokens, etc.

is being reduced materially by Chinese players. Now does that mean that it deflates this whole CapEx environment, or that really is not the case at the moment?

Yeah.

Hi, Anshul. Thank you for the inputs.

I think in terms of the investments, yes, clearly data center growth is the strongest in the US. We're also seeing some very large investment announcements by the government and by the private sector in China that I think you touched on as well.

From our perspective, I think definitely we see two or three areas that we are looking at. Our first focus continues to be the data center demand in the US.

I think India, as we also touched on in our slides, is just at a starting point and will start to grow. We're excited about how we can really enable this AI infrastructure in India both on long-haul fiber, metro fiber, as well as fiber optics within the data center.

I think that's areas we're focusing. I think Europe does need to step up.

There are some initial investments that are starting to happen and some announcements, but I think the progress and speed on the ground is still slow. I think Europe will probably be a dark horse and will start scaling up in a year or two.

In terms of your point on overall the tokens, I think that is something that's really on everyday basis that's something worth watching out for. Our macro thesis continues to be that the sheer demand, when you look at the cloud revenues of all the hyperscalers, that continues to accelerate quite strongly.

Even some of the new players like Meta and Oracle are talking about increasing and preparing their data centers for third-party sales. It does seem to be that the demand is outstripping supply currently.

I agree with you that the price points will have to become more efficient, and this large delta in cost of tokens between the US cloud providers and China, there has to be something that has to give at some level. From a sheer CapEx spend in the US, we continue to be optimistic about that.

We continue to build our product portfolio to help serve them and help them build this out faster than ever before. That's what we're working on.

On your question on the semiconductor, again, as I said, that's not really our top priority right now. We're very focused on the opportunities that we see within the telecom and data center space.

We do have very strong glass capability, and we'll continue to evaluate whether we can utilize some of that glass capability for some of the semiconductor requirements. That's not immediately a priority right now.

Okay. Great.

Thanks very much. Thank you.

Hi. Am I audible?

Yes.

Yeah. I just wanted to check on the $100 million CapEx that was announced for the US plant in May.

What's the CapEx phasing like and expected commission timeline?

Yes, hi. Thank you.

What we announced was a $100 million investment over a 5-year period. This was as part of our strategy both to ensure that we have a good balance of cable and connectivity onshore in the US, primarily to help certain customers and be able to serve them with a quicker turnaround.

The second reason we're doing that is to be more closely aligned and customize our products for their requirements and to also be able to serve them for their future requirements. This is something that we continue to have conversations with our customers, particularly on the data center side.

As we progress and as we get more clarity from our customers in terms of their requirements, we'll probably update you by next quarter in terms of progress on that.

Do we have any capacity number in line, what we plan to do there?

This is mainly be for the connectivity side, so that it doesn't really translate into a capacity per se. As I said, this will be a connectivity facility that we are planning both for the telecom segment and the data center segment.

Once we're able to finalize and detail out the investment and the scale-out of that investment, then we'll be able to share that.

Sure. Thank you.

Hello?

Yes.

My question was about you mentioned germanium and helium constraint. If it continues through FY '27, it will affect your order book or and any margin?

Or do you have any other suppliers or technology to overcome this? Hello?

Yes. I think what I shared earlier as well that we are actively working to diversify our suppliers across our raw materials, whether it's germanium, helium, or others.

There have been cost increases that Ajay spoke about in terms of our input costs. We are very mindful and looking at improving our supply quarter-on-quarter.

As I shared, we feel confident about that. At the same time, we are taking in orders from our customers both on telecom and data center side, on BharatNet side, keeping in mind the availability of our raw materials.

Good evening, sir. Thank you so much for opportunity.

Firstly, I wanted to understand what will be your debt level and the working capital for the year end of the FY '27 after this QIP?

We have disclosed that we broadly believe that we'll be net-debt-free even during the financial year. The raise of QIP will definitely help along with the internal accruals.

At the same time, there has been consistent focus on reducing the net working capital by engaging into dialogues with the customers on reducing the payment terms, and that should definitely help us.

Okay. Got it.

Secondly, if you can help us in the understanding on the margin perspective, like you mentioned that you are working very aggressively on reducing the consumption of the germanium, which will help you in increasing in the gross margin going forward if the germanium cost reduces or remains stable at this price. If you can explain how maximum the margin can help you in the gross level, and also on the EBITDA if you can bifurcate between telecom versus data center, what is the margin difference?

We don't normally call out the margin difference, but what we have shared in the past is that yes, the margins broadly for the solutions we sell to data center are higher margins than the telecom segment. I think from a cost input perspective, I do want to call out that while the costs are higher right now, I think for us, our focus is to ensure that we are able to utilize our facilities.

Just through utilization of our factories, we'll be able to have better EBITDA margins being realized. Then on top of that, as we increase our connectivity attach rate, which we shared, going up to 25% by quarter four, that'll further enable our EBITDA margin to increase.

These are the two, three things why we feel confident that the margins will move towards the 23% that Ajay spoke about.

Thank you. Thank you, everyone, for taking time to hear us out today.

We truly believe STL is well-positioned to play a pivotal role in building the digital infrastructure of the future. We remain available to take any of your follow-up questions.

You may reach out to us at official email ID [email protected]. Once again, thank you, and we remain grateful for your continued support.

Thank you.