Networks that make us human

STL is an industry-leading integrator of digital networks that enables telcos, cloud companies, citizen networks, and large enterprises deliver enhanced experiences to their customers.

In the backdrop of strong industry tailwinds of large global 5G investments, increasing FTTx penetration, and continued investments to modernize networks by governments globally, STL has devised a well-rounded strategy to deliver on its global plans through the company’s three growth levers – grow optical business, globalize system integration, and build disruptive wireless solutions. Armed with an integrated business model, offering system integration services including optical networking solutions, wireless solutions, and network software solutions, the company has made a series of strategic investments, thereby increasing its total addressable market by 5×.

In the optical networking segment, in November 2020, STL acquired Optotec, Italy, at an enterprise value of €29 million, and along with Metallurgica Bresciana S.p.A., a European specialized optical cable manufacturer that it had acquired in July 2018, the group has available a capacity of 50 million fkm fiber and 42 million fkm OFC.

STL strengthened its system-integration segment and acquired Clearcomm Group Ltd., a UK-based network integration company in July 2021. The manufacturer had in September 2019 acquired IDS Group, a data center network infrastructure design and deployment specialist based in the United Kingdom. This move enhanced the presence of its network-integration solutions across UK and Europe.

In the wireless segment, STL launched Accellus, its flagship solution for 5G-ready, open, and programmable networks. In January 2020, STL had announced an investment in ASOCS, a developer of open, disruptive, and virtualized radio access network (vRAN) solutions, delivering 4G and 5G for cellular networks. As a part of the overall transaction, STL had acquired a 12.8-percent stake in the company and board representation. With its disruptive efforts in this area, STL has built intellectual property with 54 patents as of Q2 FY22.

H1 FY22. STL reported a robust 30-percent YoY revenue growth in its financial results for the second quarter ended September 30, 2021. And recorded ₹15.08 billion in revenues with ~43 percent coming in from the EMEA region and ~12 percent from the Americas.

Its order book grew from ₹10300 crore same time last quarter to ₹11,500 crore by the end of H1 FY22. Out of this, ₹4200 crore is executable in this fiscal itself. The manufacturer also has about 23 percent of O&M revenues, which will start kicking in, in FY23 and that will be a non-trivial contribution to the revenues as they go ahead from FY23 onwards.

The company continued to focus heavily on technology innovation, taking big steps like investing ~3.5 percent of its revenues in R&D and announcing a 5G R&D lab in the UK. STL further strengthened its patent portfolio in Q2 FY22, taking the total patent count to 636. 5G wireless solutions and optical interconnect – STL’s strategic growth areas – contributed to more than 50 percent of IP filings in the current quarter.

FY2021. For the year ending March 31, 2021, the company reported ₹4825 crore in revenue. STL closed the year with 27-percent YoY revenue growth, and exports at 42 percent.

Backed by large global deals, the order book stood at ₹10,754 crore, out of which about ₹5500 crore is executable in FY22 and the rest in FY23 and beyond. Part of the open order book is relating to the maintenance part, about 25 percent, therefore that extends over a much longer period, beyond the immediate year or two.

Some key financial highlights:

• Won marquee deals – STL won multi-year, multi-million global deals, such as a three-year strategic collaboration with Openreach to provide millions of kms of optical fiber cable to help connect UK with a full-fiber network; ~USD 100 million deals in the MEA region – for building future-ready digital networks and partnership with Airtel to build optical network across 10 circles;
• Exhibited strong growth in OFC volume and optical interconnect business. STL grew its OFC volume by more than 35 percent in FY21. Optotec’s interconnect products are now integrated into its Opticonn solution;
• Grew patent portfolio by 105 percent. With 191 filings in FY21, STL’s global patents reached 569, also adding the first 5G patent;
• Developed 5G and open-source products. STL developed hardware plus software offerings, including Garuda indoor small cells and 5G radios and tested programmable FTTx with a large Asian telco;
• Delivered exponentially despite the pandemic. With technology excellence, STL took Project Varun (Navy Communication Network) and Mahanet (Rural Broadband) to 92-percent and 98-percent completion, respectively; and
• Hired industry stalwarts globally across the US, the UK, Singapore, and India.

STL has set a target to reach ₹100-billion revenue run rate by Q4 FY23 with net debt/equity <0.5 and RoCE >20 percent.