STLTECH Q3 FY26 earnings call.
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Revenue
₹1,257 Cr
verified against source
Revenue YoY
12%
reported change
EBITDA
₹129 Cr
latest reported figure
Source
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record provenance
Actual signal trajectory
Where this quarter sits.
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What the record says.
Sterlite Technologies reported Q3 FY26 revenue of INR 1,257 crores with YTD revenue up 12% YoY at INR 3,311 crores. EBITDA stood at INR 129 crores (10.3% margin), impacted by 760bps tariff headwind from US-India trade tensions that reduced margins despite strong underlying operational improvement (EBITDA improved from 12.2% in Q2 FY25 to 17.9% pre-tariff). YTD EBITDA grew 35% YoY to INR 410 crores with margins at 12.4%. The company demonstrated strong order momentum with YTD order intake of INR 4,263 crores (+40.3% YoY) and open order book of INR 5,325 crores providing multi-year visibility. North America contribution increased to 36% of revenue (from 25% in FY25), highlighting the tariff exposure. Management is implementing mitigations including US local manufacturing ramp-up and tariff pass-through in new contracts, expecting full impact over 2-3 quarters. The medium-term target remains 20% EBITDA margins. Key risks include unresolved US tariffs (~50% on Indian exports), Germanium supply concentration from China, and a pending income tax transfer pricing order (INR 15-20 crores potential deposit).
Colored figures show movement against the previous available record.
Guidance to track
- Management reiterated confidence that at 70%+ utilization levels, the business should deliver 20% EBITDA margins, noting excluding tariff impact margins are already near 17-18%.
- Contract renegotiations with US customers are ongoing; new pricing is expected to gradually kick in starting Q4 FY26, with full impact materializing over 2-3 quarters as old 12-15 month contracts expire.
- Management maintained guidance of scaling data center and enterprise revenue contribution from 20% to 30% within the next 12-18 months, supported by INR 500 Cr YTD orders from this segment.
Risks flagged
- 50% US tariff on Indian exports created 760bps headwind in Q3, reducing reported EBITDA margin to 10.3%. Management expects partial mitigation through new contract pricing and US local manufacturing, but full resolution dependent on bilateral trade agreement.
- Critical raw material for optical fiber glass manufacturing is tightly controlled by China. Management acknowledged supply risk and is pursuing alternative global sources and local Chinese sourcing, but disruption could impact production.
- Tax authority issued notice for transfer pricing adjustments in regular assessment. Management expects no material financial impact but may require INR 15-20 Cr deposit (15-20% of disputed amount).
- US subsidiary appealed district court judgment to US Court of Appeals (September 2025). Bond posted successfully, no immediate financial payout, but outcome remains uncertain and could have material implications if appeal fails.
Key quotes
- While underlying margin momentum remains strong, we have proactively started implementing some mitigations measures such as passing on some proportion of tariff cost to customers and aggressively ramping up local production in the US facility.
- We do see that ultimately for players like us who are supplying into Europe and US we are focused on long-term contracts with our customers whether it's on the telecom side or the data center side.
- We are confident that ultimately this is a business that should be 20% EBITDA margins and actually you can see that in our results already that if you exclude the tariff impact then we would almost be at that 80-19% level.
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