Sterlite Technologies Ltd (NSE: STLTECH) Q3 2026 Earnings Call dated Jan. 23, 2026
Corporate Participants:
Ankit Agarwal — Managing Director
Ajay Jhanjhari — Chief Financial Officer
Analysts:
Unidentified Participant
Jalaj Manocha — Analyst
Nikhil Choudhary — Analyst
Saket Kapoor — Analyst
Balasubramanian — Analyst
Dhaval Jain — Analyst
Akshat Mehta — Analyst
Bajrang Bafna — Analyst
Sunil Jain — Analyst
Presentation:
Jalaj Manocha — Analyst
Ladies and Gentlemen, good day and welcome to Sterlite Technologies Limited Q3FY26 earnings conference call. Before we proceed with the call, let me remind you that the discussion may contain forward looking statement 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 achievement to differ significantly from what is expressed or implied in such forward looking statements. Please note that we have uploaded the results and earnings call presentation on STL’s website and the same is available on the Exchange. In case you have not received the same, you can write to us and we will be happy to send the same to you to take us through the results and answer your questions.
Today we have the Senior management of Sterlite Technologies Limited represented by Mr. Ankit Agarwal, the Managing Director and Mr. Ajay Janjari, Chief Financial Officer. We will start the call with brief overview of the quarter gone past and then conduct the Q and A session. As a reminder, all participants line will be in listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touch tone phone. Please note that this conference is being recorded.
I will now hand over the call to Mr. Ankit. Over to you sir.
Ankit Agarwal — Managing Director
Thank you. Good day everyone. Thank you for joining STL’s Quarter 3 FY26 earnings call. I begin by walking you through the key highlights from our investor presentation after which Ajay, our CFO will take you through the financials. STL is a global leader in digital connectivity infrastructure serving telecom operators, data centers, citizen networks as well as large enterprises. We operate through two business divisions, Optical Networking Business ONB which gives us end to end play in optical fiber, fiber cables, specialty cables as well as connectivity. Our digital and technology solutions adds Cloud, Cybersecurity Enterprise, SaaS, AI and Product Engineering.
We are number one in India as an end to end optical manufacturer with almost 8% optical fiber cable market share outside of China, with 30 plus years of leadership, more than 780 patents and 10 plus zero waste manufacturing facilities worldwide, STL is leading the next wave of global digital infrastructure. At STL we are one amongst 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 are the backbone of optical fiber.
From there we draw the highest grade optical fiber, design high density cables and develop reliable connectivity products that power data centers and telecom networks around the world. This full stack integration right from raw material and 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, data denser and more reliable networks in the AI era.
As we complete nine months FY26, our strategic direction in optical networking remains unchanged. We continue to focus on gaining market share in optical fiber cables, improving connectivity attach rates and expanding our data center portfolio to meet the growing demand from AI LED infrastructure. At the same time, we are strengthening our technology and cost leadership in the optical domain. Beyond Growth Our mission is to build for the future through STL Digital. We are investing in technology and domain capabilities to create long term differentiation while ensuring all initiatives deliver profitable and sustainable growth. These priorities will guide us through the rest of FY26 and beyond, enabling us to not only meet today’s needs but to shape the digital networks of tomorrow.
Moving on, we will now speak about our performance in the optical networking business and our focused journey towards gaining our market share. We are at the intersection of three powerful multi year investment cycles, FTTx data centers and 5G, creating a strong structural tailwind of optical infrastructure. FTTX is accelerating globally with deployments rising from 151 million fiber kilometers to 170 million fiber kilometers by 2030. In the US alone, over 100 million homes will be served by fiber by 2030. Supported by large government programs like VEED and BharatNet. In India, data centers are the fastest growing driver of fiber demand.
Cru Projects Global DC led demand to grow at 76% CAGR from 2025 with hyperscaler driving, long haul and inter data center connectivity. Global DC capex is expected to approach almost $600 billion by 2027. 5G is also scaling rapidly with 6.3 billion subscriptions expected by 2030 carrying 80% of all mobile data traffic. This requires a massive amount of fiber, blackhaul, fronthaul and network distribution. Together these three cycles are creating a structural multi year demand tailwind for fiber and connectivity, positioning STL at the center of the next global digital infrastructure buildout. Next we show you how global telecom and technology leaders like AT&T Unity, BT and many others are aligned and back in backing optical fiber as the base of the Digital future across 5G broadband data centers and AI infrastructure.
The takeaway is simple fiber remains the backbone of all digital infrastructure. Moving on slide 11 shows how the AI revolution and the rapid data expansion are creating once in a generation opportunity for optical connectivity. Data center capacity is expected to grow sharply over the decade with significant share of new demand coming from AI led infrastructure. Hyperscalers are stepping up investments pushing global data center IT spending towards multi trillion dollar levels. AI data centers are fundamentally different as they are far more fiber intensive. GPU dense racks need almost up to 36 times more fiber than traditional CPU setups and overall fiber density is almost 70% higher.
This is driving a strong surge in fiber demand within the data centers. At the same time, data centers are increasingly being connected to each other which accelerating growth in data centers interconnect market this segment is expected to more than double by 2030 adding another large source of fiber demand globally. We are well positioned for this shift. Our end to end make in India for the world AIDC portfolio is built for the GPU dense high bandwidth low latency environment. Our enterprise and data center business is gaining traction with with 20% revenue contribution in year to date FY26 and we remain on track to scale this to 30% and expect it to be a key growth driver in the medium term.
According to CRU, global optical cable demand growth for 2025 has been upgraded to about 4% year on year reflecting strong visibility led by many mainly by North American data center build out and improving execution in China. Importantly, demand is now consistently outpacing domestic supply in North America, keeping the lead times tight. Looking ahead, North America is said to be the main growth engine powered by AI led data centers. DCI builds and continued FTTX expansion. CRU expects it to deliver the strongest regional growth of 13.7% CAGR through 2013. APAC excluding China as a second major growth pillar growing at almost 6% CAGR led by India and Southeast Asia.
This is supported by projects like BharatNet, higher telco, capex and rising data center investments. Overall this points to a sustained multi year upcycle in fiber demand with North America and APAC ex China, both core STL focused markets. Going forward we’re also seeing positive momentum in India, Southeast Asia and parts of Europe which also aligned with our strategy. Our order intake clearly shows how STL is capitalizing on the market recovery. Year to date FY26 we have recorded 4263 crores in orders, a strong 40.3% growth over last year. This reflects both improved demand and our ability to win at scale.
The momentum is driven by three main factors. First, large scale data center connectivity wins aligned with Global infrastructure buildouts Second, a breakthrough into Tier 1 North American telecom customers strengthening our presence in the critical market and third, well deserved diversified order book balancing capex led bills with long term service contracts. Overall, this performance reinforces our strategic positioning and gives us strong visibility and confidence as we move forward. Let me briefly highlight STL is sending its innovation leadership this quarter. We advanced next generation optical technologies I MOU with QNEW Labs, a deep tech cybersecurity firm positioned us with quantum secure communications while successful multi core trials with Colt, a premier digital infrastructure company in London in the United Kingdom validated our readiness for real world deployment.
Our products we continue to scale across fiber connectivity and copper. We expanded our ABR intermittent bonded ribbon portfolio to 1728 fibers and 3456 fibers for data centers. Enhanced data center micro cables launched a Nano DC portfolio as well as optofit connectivity solutions. In addition, we also secured railway signaling approvals in Copper for supporting our diversification. I Innovation is backed by a strong IP engine with 780 patents including 23 new filings in the last quarter. We are also building future capabilities through hollow core fiber for ultra low latency and AI enabled fiber sensing which is seeing growing commercial adoption.
STL won four major awards in 2025 across data center innovation, leadership, cabling and social impact. We are delivering global firsts, India’s first quantum secured networks, green hydrogen projects, the world’s slimmest 160 micron fiber showing SLG leadership in high performance and sustainable solutions. Overall, this reflects our focused approach in deep tech innovation, IP led differentiation and long term value creation. Slide 15 of the presentation showcases our strengthened data center portfolio with the launch of the world’s slimmest864 fibers in a ribbon cable. We now offer full stack DC connectivity suite fiber and optical fiber and copper cabling, pre terminated systems and high density IBR designed for faster deployment, low latency and scalability.
The portfolio is AI and hyperscale ready, meeting global standards and sustainability requirements. It is supported by in house future ready manufacturing and strong goto partnership. Slide 16 highlights STL’s leadership in multicore fiber, a key enabler in quantum safe multi terabit networks. Multi core fibers allow four to seven times higher capacity with the same physical footprint, improving space efficiency by lowering deployment infrastructure costs, making it ideal for AI data centers, long haul 5G and high performance interconnects. We have shown strong capability enabling India’s first quantum key distribution over multicore fiber, completing live 100 kilometer testing and becoming the first globally to deploy multicore fiber in both aerial and underground networks, further validating our successful trials with Colt in the uk.
Overall, this position is at the forefront of quantum safe next generation optical networks with strong relevance for global hyperscalers and carriers. Looking ahead to STL’s next generation fiber portfolio, we have two exciting launches coming up, G654E and Hollow Core Fiber. To start with, G654E delivers around 30% lower signal loss along with a larger core. This makes it ideal for AI led high power long distance networks such as 400 gig 800 gig data center links, national backbone and subsea cables. At the same time, hollow core fiber is truly a game changer because the light travel through air filled core it offers 30 to 47% lower latency and supports extremely high bandwidth.
As a result, it opens up major opportunities in data center interconnect sensing and quantum communications. Put together, these launches will place STL among a select group of very few global players ready for large scale G6.5 for deployment and early leadership in hollow core fiber. Exactly where the future of fast low latency networks are headed. Speaking of our market position and attached rate trends, our global edge China OFC market share remains stable at 8% year to date FY26 reflecting disciplined execution in a competitive market with clear focus on gaining our share over time through our technologies.
Our optical connectivity attach rates moderated to 17% in year to date FY26 from 22% in FY25. This was primarily driven by product mix and project timing along with a sharp acceleration in OFC revenues leading to a higher base. We view this moderation as temporary and importantly the long term opportunity of connectivity remains strong. Our portfolio is expanding and we’re increasingly focused on selling our integrated solutions of the cable and connectivity rather than standalone products. Taken together this shows that our core OFC business is stable while there is a clear Runway to drive higher value through attached LED growth over the medium term.
Now turning on to the financial performance of optical networking business. In quarter three FY26 the revenues came at 1174 crores reflecting a strong volume recovery and growth Q on Q and Y O Y basis for a y to date FY26 revenues increased to 3115 crores and indicating sustained momentum on profitability. Quarter 3 FY26 EBITDA margin was 11.2% moderating versus earlier quarters due to tariff related headwinds. However EBITDA in absolute terms grew with year to date FY26 EBITDA at 404 crores supporting margin recovery as volumes scale and the cost normalize. Overall this reflects improving top line traction clear path to margin recovery as operating leverage kicks in.
Let me now take you through a continued growth momentum in STL Digital. We have global delivery footprints across India, US and UK with strong capabilities in data analytics, AI, cloud, cybersecurity and enterprise SaaS serving diversified industry verticals. During Q3 we added one new major customer taking our total base to 34 and secured US dollar multimillion SAP SAP 4 HANA deal with US based healthcare major demonstrating execution capability in large complex programs. Our team now comprises of 1120 consultants supporting growth deal sizes and multi service engagements. Financially we closed the quarter with an open order book of 276 crores providing strong revenue visibility.
Overall STL Digital well positioned for scalable growth driven by customer centricity, innovation and increased deal depth. Moving to the next slide, we showcased steady progress in digital business both on scale and profitability. Quarter 3 FY26 revenue was 86 crores with stable performance over the nine months at 215 crores broadly in line with the last year despite a tough environment. More importantly, quarter 3 FY26 EBITDA was 1 crore marking another consecutive EBITDA positive quarter reflects operating discipline and better project quality. While still in the scale up phase, the business is clearly moving in the right direction while stabilizing revenues and improving profitability.
Now I will hand over the call to Ajay to take you through the financials.
Ajay Jhanjhari — Chief Financial Officer
Thank you Ankit and thanks to everyone for joining us today. I’ll take you through the key financial highlights for Q3 and YTD FY26. Our revenue for Q3 stood at INR 1,257 crore reflecting strong growth momentum with YTD FY26 revenue up 12% year on year. At INR 3,311 crore growth was broad based across business segments. EBITDA for quarter three was INR 129 crore with a margin of 10.3%. Margins moderated in the near term due to tariff headwinds. For YTD FY26 EBITDA grew 35% year on year to INR 410 crore with margins improving to 12.4% year on year.
PAT before exceptional items stood at 9 crore in the current fiscal compared to a loss of 78 crore last year, a clear turnaround which highlights strengthening underlying profitability of the business. The exceptional item for the quarter includes a one time impact of rupees fifteen crore related to the new labor code. Overall, the business continues to scale with improving earning quality. Operational EBITDA has improved for five consecutive quarters rising from 11.2% in Q2 of FY25 to 17.9% in Q3 of FY26 driven by a richer product mix and a higher contribution from the US market. However, the US tariff reset effective mid quarter two of FY26 created a temporary headwind reducing reported EBITDA by almost 760bps in quarter three of the current fiscal and bringing the reported margins to 10.3%.
While underlying margin momentum remains strong, we have proactively started implementing some mitigation measures such as passing on some proportion of tariff cost to customers and aggressively ramping up local production in the US Facility. We still remain hopeful of early resolution of the India US Bilateral Trade Agreement which will provide a clear path for further margin expansion. From a geographic standpoint, our revenue mix continues to diversify. North America share increased from 25% in financial year 25 to 36% in the current financial year while Europe remains a significant contributor at 40%. This balanced regional footprint reduces concentration risk and position us well to capture growth across key global markets.
Moving to the Order Book we have seen continued momentum this quarter. Our open order book stood at 5325 crore up from 5188 crore in Q2FY26 reflecting healthy order inflows and strong market confidence. Of this 988 crore is slated for execution in the next quarter while the remaining 4,337 crore is scheduled for execution over FY27 and beyond. This robust order pipeline provides strong revenue visibility and reinforces our growth outlook for the year. On slide 30 we have shared an abridged snapshot of our reported numbers for your reference. Net Debt stands at 1331 crore with debt to equity ratio of 0.87 and net debt to EBITDA at 2.58x with this now I hand it over back to Ankit for updates on our social responsibility initiatives and closing remarks.
Ankit Agarwal — Managing Director
Thank you Ajay. STL’s CSR initiatives continue to create a strong and measurable impact across healthcare education. Our flagship healthcare program Swastya Suraksha on the best Rural Healthcare initiative of the year 2025 at the India Social Impact Awards recognizing a sustained contribution to rural and tribal healthcare. In education, the Roboedge program received the Best Education Support Initiative of the year 2025 at the Indian CSR Awards for advancing STEM Learning and Innovation. Roboedge students also excel globally in International Robotech’s Championship 2025, winning multiple podium positions. Nine students represent India showcasing talent, teamwork and innovation reflecting STL’s commitment to build a stronger future ready society.
At STL, sustainability is central to our purpose. We are proud to hold an MSCI ESG A rating and are committed to achieving Net zero emission by 2030. Our strategy is built on three pillars environmental sustainability since FY19 we have diverted 276,000 metric tons of waste, recycled almost 11 million cubic meters of water and reduced over 43,000 tons of carbon through energy efficiency. Over 36% of our procurement is local and we partner with HYGENCO to advance clean hydrogen social responsibility. In addition, with aligned with the 16 UN SDGs, we have positively impacted 920,000 lives through education, empowerment and health care, alongside installing 4,500 kilowatt of solar capacity.
Strong governance with two big four auditors and robust governance committees, we’ve earned 100 plus ESG awards since FY19. Notably, HDL is the world’s first optic fiber manufacturer, certified for zero liquid discharge and zero waste to landfill, setting a true industry benchmark. Let me close now with our focus areas in optical Our goal is to be the world’s top three driving innovation and cost leadership, growing in focused markets, increasing connectivity, attach rates and rapidly scaling our data center portfolio. This strengthens STL’s role as a key enabler of global digital infrastructure. In digital, our priority is simple grow revenue with profitability through disciplined execution and scalable platforms.
These priorities position SGL for sustainable long term growth. With this, I’ll close my opening remarks and hand over to the operator to open the floor for questions. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their Touchstone telephone. If you wish to remove yourself from the question queue, you may press Star and two participants are requested to use handsets while asking a question. Participants, you are requested to limit your questions to two per participant. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mr. Jalaj from Swan Investment. Please go ahead.
Jalaj Manocha
Yeah, Hope I’m audible.
Ankit Agarwal
Yes.
Jalaj Manocha
Yeah, thanks for the opportunity. My first question was around the tariffs and the impact on the margins. So two parts of it firstly, should we consider this is the maximum impact the tariffs would have had? Because since it was the full quarter impact we would have had this quarter first part. And secondly, how are we looking to mitigate the impact going forward? What sorts of discussions are we having with the clients? And secondly, what actions are we taking? One, you have mentioned specifically about opening up the plant in the us. Is there some other way of processing or different location altogether, something on those lines?
Ankit Agarwal
Yeah, thank you. So as we shared, we’ve, you know, this has been a full quarter of the tariff impact. Definitely. You know, ultimately the amount of tariff we pay is a function of the amount of business that we do, particularly the products that we manufacture from India and we sell into the US market. As you, as you also mentioned, we do have some options in terms of our manufacturing facility that we have in the US and ensuring that that is, you know, utilized to the best possibility. We are evaluating various other options of how we can, you know, reduce our impact of the tariffs.
But principally as we have shared our focus, markets and our growth markets continue to be the US and Europe in particular. So we do see that these will be markets where we will continue to focus in terms of volume and in terms of the tariff impact itself. Definitely we will see what more we can do to reduce the percentage that is impactful to us. Beyond this, I won’t be able to share for competitive reasons and confidentiality reasons.
Jalaj Manocha
Got it sir. And sir, one more point was. So let’s assume there’s a tariff of 20% on the goods. So the realizations we are booking in our PNL right now would be if the item was worth hundred. So we are booking it at 125 right now.
Ajay Jhanjhari
So the tariff is actually a cost which is on us. It is now up to us whether we can pass it on to the end customers or not. So the realization will include everything, every cost which we are incurring in order to get the revenue.
Jalaj Manocha
Sir. So just to get it right, so let’s assume the po. So the, your. Your. If the growth is 20, so it will be partially because of the fact that.
operator
Sorry to interrupt. Hello.
Jalaj Manocha
Yeah, I’m just, just closing up with the question if you don’t mind.
Ajay Jhanjhari
Just in order to answer your question, what you have to see is the PO from end customer doesn’t mention what is the tariff and what is the cost of the goods. So the PO comes for the entire amount. Now the question I can delink with it is whether the customer is absorbing the cost of tariff or not. Currently we are in the process of negotiation because this is the time when we enter into new contracts that is going on. So then the impact on customer because of the tariff will be clearly visible. Not right now.
Jalaj Manocha
Got it. Thanks a lot. Thanks.
Ankit Agarwal
Thank you.
operator
Thank you. The next question is from the line of Mr. Nikhil Chaudhary from Nuama. Please go ahead.
Nikhil Choudhary
Thanks for the opportunity and congratulations on very strong revenue growth. First question, Ankit on AI opportunity. So we have been talking about the portfolio we are creating especially related to AI product where we are in that journey and the 30% revenue comment which you gave earlier. Any possible timeline when we can reach 30% revenue from enterprise business.
Ankit Agarwal
Yeah, so thank you Nikhil. So I think definitely as we’ve been speaking this is pretty interesting market dynamics where you, you have the telecom operators looking to build out networks for themselves. They’re also building interconnects for the data center requirements and then you’ve got the data centers themselves putting fiber within the data centers and in between data centers. So clearly fiber is the preferred medium. What we’re clearly seeing is that the density requirements are increasing where space is clearly a constraint. And a lot of our focus on our product development, our IP and our technology has been to solve for some of these challenges.
Happy to share that we continue to make good progress quarter on quarter. If you would have seen the press release we shared we had almost 500 crores of orders broadly from the enterprise and data center segment. So this is where you know our portfolio is now getting converted into good order wins. And you know as the, as the demand continues, as a portfolio continues to improve both on cable and connectivity, we do, you know, we do expect this ratio that we spoke about 20% to move towards 30% in the, you know, probably next 12 to 18 months.
Nikhil Choudhary
Great, very encouraging. Second, just on margin part I think you partially addressed it that you are taking some mitigation measures to reduce the overall impact. But where could we see if margin, let’s say going ahead. Any rough even directional comment about where we are heading? If we include everything the mitigation measure, internal efficiency where the margin could settle, let’s say in FY27 we won’t be.
Ankit Agarwal
We won’t be able to give a specific number. But what we’ve discussed in our Nikhil in our previous calls as well, you know, directionally this is a business where you know, if we operate with the right utilizations of you know, 70% plus, you know, 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 you know, if you look exclude the tariff impact then we would almost be at that 90 odd percent, 80, 19%. So you know, I think directionally the, you know, the volumes are increasing, our utilizations are improving and now it’s a function of how we can mitigate the impact of tariffs.
Look at other ways to, you know, reduce our costs and that will, that, that should help us in our margins going forward. But as you can appreciate it’s a very dynamic situation in terms of tariffs. There are live conversations going on between the governments in terms of where it settles. So I think you know, hopefully we get to, we get some input from the, from the government in the next few months.
Nikhil Choudhary
Got it. Ankit, last one if I can. Just wanted your thought on possible impact of Europe with the ifta. If you haven’t. That’s it so much, thank you.
Ankit Agarwal
No, nothing currently at the moment. Again we are very well set up in terms of our operations in Italy. We have scaled that up quite well. We of course also have customers in the UK which would be outside of this FTA and already we do not have any tariff to that effect in the uk. So overall I think it would be neutral to us in terms of the, the impact.
Ajay Jhanjhari
No.
Ankit Agarwal
So but that can increase a beneficial position for us in future. But right now because we are having a local manufacturing setup already there, we don’t see much impact.
Nikhil Choudhary
Yeah, got it guys, thanks a lot and good luck.
Ankit Agarwal
Thank you.
operator
Thank you. Thank you. Participants are requested to limit your questions to two per participants. The next question is from the line of Saket Kapoor from Kapoor and company. Please go ahead.
Saket Kapoor
Yeah, and thank you for the opportunity sir. Firstly, just to, just to clarify, the two factors that attributed to the lowering of margins are particularly the labor law implementation affected in the P L and the tariff impact are these two the key reasons why the margins are lower to 13% 10.3% EBITDA margin.
Ajay Jhanjhari
So labor code impact we have considered as an exceptional item. So that is not reflective in the EBITDA margin. So the only impact which is material enough is the tariff impact which we have clearly demonstrated. If you see on the investor presentation.
Saket Kapoor
Okay. And just taking that into a foray, if, if you could just elaborate, just quantify for us how much have been the impact as Ankitji was mentioning about the PO order from the customer. That does not take into factor the the tariff impact. So which line item does the tariff get displayed? Whether it is the other expenses or the cost of raw material. Where do we Factor in the tariff impact.
Ajay Jhanjhari
So generally the tariff impact on the exports, what we do is settled in the cost of raw material and component consumed. Then they are because we are having a local manufacturing unit. Part of it is also in the others.
Saket Kapoor
Okay, and next question number two was regarding the the utilization levels for the US and how are the OIF and the OFC prices currently trending? Sir.
Ankit Agarwal
Yeah, Saket sop. I think as we shared last time also we’re not disclosing utilization levels at unit level or company level. But broadly what we can share is that the utilizations have improved quarter on quarter. One thing that we are mindful of particularly is know in our, in our glass operations is availability of germanium. As we have shared in the past as well, this is something that is tightly controlled particularly by in China. And so the continued availability of germanium will be important factor for our manufacturing of glass and then ultimately fiber and cable. So that’s something that you know, we are mindful of.
But we are taking all actions to mitigate that risk. From the pricing perspective, I think overall it has been stable. It has been steady both in China as well as globally. So I don’t see any concern on that side. And as we said 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.
Saket Kapoor
Okay, so your small answer is that prices have remained, the realization have remained somewhat flattened or the same vicinity that was for the second quarter. So there is no uptick.
Ankit Agarwal
Yeah, there’s no decline for sure. I think the prices always vary a little bit by market. But as I said for us we don’t really play in this spot market at all. We just focused on our solutions for you know, long term contracts with our customers.
Saket Kapoor
Okay, and last point was about the Bharatnet rolling out, sir. And we and our participation in the same. How are we seeing traction on ground with respect to how the rollout for Bharatnet has been in the country?
Ankit Agarwal
I think it is currently going on. This is the phase three that is going on. And as you know our, you know, group company in Venia has secured a Jammu Kashmir package where we will be supplying the cable on arm’s length basis. So that is going on. We have also achieved what is called a map, you know, manufacturing authorization from few other bidders. And I think it’s still initial stages in terms of the execution. So probably you know, through the course of this year and next two, three years is where we expect the rollout of the optical fiber cable.
Saket Kapoor
Okay, sir. Okay.
Ankit Agarwal
Yeah. Thank you sir.
operator
The next question is from the line of Mr. Bala Subramanyam from Arihant Capital. Please go ahead.
Balasubramanian
Good evening, sir. Thank you so much for the opportunity. Sir. My first question, I think we are working on next generation fiber technology especially when we can expect the commercial rollout for Hollow Core Fiber, HCF and G654E Fiver. And what is the projected adoption rates in long haul networks and data center interconnects?
Ankit Agarwal
Yeah, so I’ll touch on hollowcore first. I think that’s a. It’s a very exciting technology. It’s in the public domain that particularly Microsoft and Amazon are really looking to deploy this at a good amount of scale. We’re also seeing some deployments of this in China as well. So clearly it’s moved from say the phase of concept to being on the ground I think practically over the next two to three years is when we see larger scale rollouts happening. It’s still there are commercial challenges to deploy this fiber in terms of the cost of manufacturing is extremely high and the process speeds are very, very low for all the manufacturers globally.
So this is where there will be certain time and effort to scale this up and make it viable from a larger scale perspective. But the impact to the network and the impact to the hyperscalers is very real. So it’s quite an exciting time to work with them. Just to be clear, there are no global standards still set on hollowcore. So that also has to be done in terms of an industry standard to create to make sure that this can get rolled out at scale G654 as well in some similar ways is a little bit more advanced.
There is a reasonable amount of demand that we’re seeing globally. But again this is, we do see the realizations to be definitely better than standard fiber and it can enable typically 70 to 100% longer reach. So again there is a good amount of opportunity here. But I would say less than 5% of the world market is with this fiber right now. But good potential going forward.
Balasubramanian
My second question, I think we have been partnership with Cold Technology Services for Multicore Cyber. I think the trials also almost.
operator
Sorry to interrupt. Can you rejoin the queue for more question?
Balasubramanian
Okay, thanks.
Ankit Agarwal
Thank you.
operator
In participants, in order to ensure that the management answers all the questions you are requested to limit your question to one part. Participants, the next question is from the line of Dhaval Jain from Sequent Investments. Please go ahead.
Dhaval Jain
Hello sir. So my couple of Questions are, the first question is as the North America revenue contribution has increased from 25 to 36% versus the last year. So I just wanted to understand like we have a tariff impact of 7% on our margins due to this. So going forward what I understand is if this revenue contribution keeps on increasing, will our, you know, the tariff impact keep on increasing and the margins keep on dragging further down.
Ajay Jhanjhari
So yeah. Hi Dhaval. So basically see as Ankit mentioned previously, we majorly act into the major long term contracts. So ideal way to deal with it is that we, yes, we are bullish on the US market but at the same time the tariff impact can be passed on to customers only at the time of renewal of contracts. So that process is currently going on. So while the US revenue is expected to increase with the mitigations measures we are already working on and few of them are now in place, we don’t expect any further increase.
Dhaval Jain
Okay, and also one more question on the.
operator
Yes, you are requested to rejoin the queue please.
Dhaval Jain
One more question.
Ankit Agarwal
You can. Yeah, you can go ahead. One more question.
operator
Okay, go ahead.
Dhaval Jain
Yeah, so the question I wanted to understand is, you know, on the, the growth that we had in the revenues, was it more of the volume growth or the realizations have also contributed in the growth the 20% YUI growth majorly.
Ajay Jhanjhari
It’s a mix of both. Yes, volume has played a significant part in it. But at the same time the sale of high fiber count cables has also increased this top line, the AI one not so on the AI one overall. Value added cables and you know, higher tech cables.
Dhaval Jain
So the ballpark, I mean could, could I get an understanding of what would be the split between the volume and the value?
Ankit Agarwal
No, we won’t be able to share that.
operator
Okay sir, thank you. The next question is from the line of Akshat Mehta from Seven Rivers Holding. Please go ahead.
Akshat Mehta
Yeah, hello. Am I audible?
Ajay Jhanjhari
Yes.
Akshat Mehta
Yeah, so I just, I just wanted. To ask you an update on, on the lawsuits, right? What is happening on the U. S lawsuit and if you can share. Some light on you know, this income tax order that has come in, you know, what is that and what is the impact?
Ankit Agarwal
You can take the income tax first. Okay.
Ajay Jhanjhari
Yeah. So see this income tax matter is in the regular assessment. There are some transfer pricing adjustments for which they have issued this notice. We are quite confident that with the merits we are having in the case, no material financial impact is going to be there and we have already disclosed it in detail. If you see with the press release.
Akshat Mehta
Are we going to make any provision or we have to deposit some amount or there is no impact. As of now.
Ajay Jhanjhari
As of now there is no impact. But as per, we will have to go by the rules only so there can be a chance of some deposits. But that doesn’t exceed more than 15 to 20%.
Ankit Agarwal
Okay. And linked to the legal matter in the U.S. so in September 2025, our U.S. entity against which the case is there, it has appealed the district court’s judgment and now it’s the case has moved to the U.S. court of Appeals and whatever was required in terms of posting the bond, that has been done successfully and there is no financial payout obligation at this stage. So as we are confident of our of our appeal, we believe we have a very strong case. So as that as that progresses we shall of course update it as a fiduciary duty.
Akshat Mehta
Okay, thank you.
operator
Thank you. The next question is from the line of Bajrang Bafna from Sunidi Securities. Please go ahead.
Bajrang Bafna
Congratulations for good. So basically sir, in our existing order book which is closer to 5000 crores, if you would like to understand, suppose the US trade deal doesn’t materialize in next a couple of quarters and since you are negotiating the new orders, when can we see the impact of past orders winning? You know, getting wind and the new ones will be visible in the margins itself. You know that will be. You have indicated close to thousand crores will be executed in next quarter. So when the older contracts will expire and the new pricing will kick in.
If we just try to understand from that perspective. Thank you.
Ajay Jhanjhari
Yes. So see there is going to be a gradual shift from it. So we’ll keep on getting new orders, we’ll keep on supplying against the long, long term contracts which we are having in past. Good thing is that in US generally the contracts are currently in the range of 12 to 15 months. So we’ll start see part of the impacts from the next quarter onwards. And the full impact will take some time. It is going to be a matter of 2 to 3 quarters wherein all old contracts will be fully settled in and all the new contracts will jump.
Bajrang Bafna
Okay, just try to understand the past context at which rate you have taken and the new rate which is going on currently. What is the difference in percentage terms? If you could help that out to us.
Ajay Jhanjhari
Sorry that we can’t disclose on this.
Bajrang Bafna
No, only in percentage terms. I’m not asking any absolute $15 or dollar.
Ankit Agarwal
I mean see obviously the tariff rate is, is 50% and logically you would want to share some part of that cost to the customers. But, but really it just varies from customer to customer, the product portfolio, you know, various other terms of the contract. So that’s why we can’t give you one number. It’ll all be down to what we are able to negotiate and you know create that balance between the right, the best pricing as well as you know, ensuring we get long term partnerships.
Bajrang Bafna
Okay, thank you. So next quarter onwards your margins are going to improve even with the 50% tariffs. Mr. Okay, thank you.
operator
Thank you. The next question is from the line of Mr. Sunil Jain from Nirmal Bank Securities. Please go ahead.
Sunil Jain
Yeah, so my question again relate to the US and we had seen impact of the current of the tariff but on the currency side are we going to benefit and how is the hedging policy for contracts to supply in the us?
Ajay Jhanjhari
So we do have a robust risk management policy which makes sure that the fluctuations in Forex does not impact us in the short run. But as you rightly said in the long run when we’ll start getting new orders and again that we are going to supply there is going to be a positive benefit because we are actually net exporter by far. Almost 80% of our revenue comes from outside India and with the, with the local manufacturing setup we are having in Italy and US.
Sunil Jain
So you want to say that whatever the order you are booking you against that you book the currency or.
Ajay Jhanjhari
Yes. Yeah, yeah. So we have the robust hedging policy wherein we don’t keep any exposure open.
Sunil Jain
Okay. So the benefit of this will come gradually. Not attached yet. Okay, thank you.
Ankit Agarwal
Thank you.
operator
Thank you. The next question is from the line of Mr. Aditya from AK Investments. Please go ahead.
Unidentified Participant
Yeah, thanks for the opportunity. But I wanted to understand one thing. We have facility in the US and we have multiple facilities outside India. I know, I understand that India is 50% tariff but in a single quarter if I do the math we are burning. I mean the impact is 80 crores. That is very huge. And for a year if I do it is 300 crores that we are putting out. So what is the strategy? I know you don’t want to get into specifics but can you help him as an investor? I mean we think still it has.
A global player and they have the. Facility in the US was this. But this impact is really very huge number. Yeah. Utilize the US facility. How do we mitigate that? Yeah, yeah.
Ankit Agarwal
So look, I mean currently we have manufacturing cable portfolio in, in the US we have it in Italy and of course we have large scale mother plant kind of operations in India. And we are very, very mindful of, you know, three, four things we want to ensure that, you know, we produce. There’s a variety of portfolio products that are manufactured across our facilities. So we always have to be mindful of where, where the demand can be met from an operating perspective because there’s a, there’s a large variety on what products get produced. The second part we have to be mindful of is, you know, which is a, which is a place most optimized from a customer demand perspective where customers require certain lead times and where do we operationalize.
And then of course is the current impact of the tariff which currently is at the full 50%. So we are very mindful of the impact and the quantity that it is affecting us on the quarterly basis. And as we shared earlier, multiple actions are on to see how we can minimize the tariff while at the same time we continue to see strong demand from the North America market. Currently we do also have options of manufacturing in Europe as well and supplying into us. So all those we continue to evaluate and be rest assured that we continue to take actions where the effective percentage rate will reduce, but certainly from an absolute amount.
That’s something we continue to watch if and as and when our, you know, business to the north, to North America and to us continues.
Unidentified Participant
Sir, this is only the optical network. We are doing 30% for North America. I mean 30 to 35% in that the whole impact, I mean ATCR, if I take it it is only coming from that 300 odd crores of revenue. Is that the right math?
Ajay Jhanjhari
So you can try to do that math. But there are two, three things which is related to tariff. One is whatever the finished goods or the semi finished goods we are selling from India and then the import we are doing in us from India other than these optical fiber cables so that match will not properly fit in. If you try to find a number out of the revenue, what we can tell you is that yes, as you rightly mentioned, we have been continuously increasing our US production which can mitigate this, these tariff impacts. Partly along with it, we are assessing all the other measures to mitigate the impact to the minimum possible.
Unidentified Participant
How much can the US facility help us? I mean if you can share in, I mean ballpark number or percentage.
Ankit Agarwal
No, look, I think if you’ve seen the investments we’ve done, I think more than $50 million of investment to build a factory of a certain scale. And I think our intent has always been strategic to serve the market both from the facility there as well as from India, as you can appreciate that there is real intent from both governments to sign at least an interim bilateral trade agreement which has been imminent for some time now and continues to be imminent. So we are mindful that we need to maximize from our operations outside of India. At the same time we also need to look at other options of how do we reduce the tariff impact.
So all the actions are ongoing. And of course ultimately we do hope that some sort of trade or trade agreement does come through which will definitely impact and benefit.
Unidentified Participant
STL shows are all the best. I hope that we will be able to navigate this one and we’ll be able to ramp up and use the US facility at utmost utilization so that we can minimize impact. That would be.
operator
Thank you. The next question is from the line of Anshul Saigal from Saigal Capital Advisors llp. Please go ahead.
Unidentified Participant
Thanks for taking my question. You mentioned germanium as a prospective risk in case China stops supplying that as a raw material. What is the mitigant? Do we have alternate raw materials or alternate supplies of germanium?
Ankit Agarwal
Yeah, so as I said, we’ve, you know, there are global, global sources available in terms of. There are global. While China is the majority, there are other global geographies available for sourcing of germanium which we are both evaluating and pursuing. So that’s really the primary option. Of course from China itself there is a procedure and a process to source the germanium which we are also pursuing, including with all the government channels. And of course we also have a facility in China itself which we’re also utilizing where you know, we can use the germanium that’s available locally.
So multiple, multiple avenues are all working in parallel and where we’re confident that we’ll be able to solve any challenges we face.
Unidentified Participant
Thanks. Secondly, nearly 30 to 35% of our revenues come from North America. I’m assuming most of this will be from the U.S. from our U.S. facility are we able to, you know, kind of cater to this entire revenue or only a part of this revenue, assuming that the US facility operates at full utilization.
Ajay Jhanjhari
So currently it’s only a part of revenue. So it is a lengthy process to qualify or manufacturing unit for all the standard products which we do. And if you see in the last 2 3/4 the entire requirement has changed to high fiber count Internet ribbon cables for which there is a standard process in order to get the qualification. So all that is currently going on with the clear objective of utilizing US facility for full and then using India for the trading of the other materials or other cables.
Unidentified Participant
My question is that will it be sufficient to. Not sufficient. Not sufficient. Yeah. So there will be incremental supplies, always from other countries, particularly India, in the same, Same light. You know, can you, can you give the number of volumes that we did for this quarter for the whole company? That is.
Ankit Agarwal
No, we actually don’t disclose volumes or capacities for competitive reasons.
Unidentified Participant
Okay. Not total capacities also. I mean, not for a plant, but. Okay, okay, okay. So in, you know, asking another question, I mean, we’ve. We’ve peaked out on revenues in March 2020, I think, where we did around 5,100 crore. This is just a continuation of the question. Just hold. Okay. We’ve done 5,100 crore revenues in 2020. Assuming we do full utilization of our capacity, will we be able to reach that number or exceed that number given current. Current pricing?
Ankit Agarwal
Yes. Yes, that we are confident.
Unidentified Participant
Thank you very much. Thank you.
operator
Thank you. Ladies and gentlemen. Due to time constraint. That was the last question. I would now like to hand the conference over to Mr. Ankit for closing comments.
Ankit Agarwal
Thank you everyone for taking your time to hear us out. We remain very excited and motivated to drive this business forward and unlock its full potential. Through our efforts, we see a tremendous opportunity to connect the unconnected across the world. And especially here in India and at every village level, we truly believe STL is well positioned to play a pivotal role in building the digital infrastructure around the world. We’re happy to take any of your questions. Both Ajay and I are available through our IR team. Once again, thank you for your time and your continued support.
Jai Hind.
operator
On behalf of Sterlite Technologies Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your
lines.