Sterlite Technologies Ltd (NSE: STLTECH) Q4 2025 Earnings Call dated May. 16, 2025
Corporate Participants:
Ankit Agarwal — Managing Director
Ajay Jhanjhari — Chief Financial Officer
Analysts:
Nikhil Choudhary — Analyst
Balasubramanian — Analyst
Arun Malhotra — Analyst
Ranjay Popli — Analyst
Saket Kapoor — Analyst
Harshitt Kadga — Analyst
Aditya Jhawar — Analyst
Pratap Maliwal — Analyst
Rohan Patel — Analyst
Presentation:
Operator
In the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. You can download a copy of presentation from the company website that is www.stl.tec. Please note that this call is being recorded. Before we proceed with this call, I would like to add that some elements of the today’s presentation may be forward-looking in nature and must be viewed in the relation to the risks pertaining to the business. The safe-harbor clauses indicated in the presentation also applies to this conference call. I now hand over the call to Ankit Agarwal for opening remarks. Over to you, sir.
Ankit Agarwal — Managing Director
Thank you, Kunal. Good day, everyone. Thank you for joining us for our quarter-four FY ’25 earnings conference call. As we advance to the next fiscal of FY ’26, directionally, our strategic priorities remain the same in the optical networking business and some of the key strategic priorities for FY ’26. Our focus remains on driving growth by increasing market-share in opticate fiber cables and improving our connectivity attach rates. To achieve our goal of generating significant revenue from data center — enterprise segments, we will accelerate the development of comprehensive data center product suites and tap a vast potential in this market. Additionally, we will sustain our efforts to drive technology and cost leadership in the optical domain. As we build STL Digital, our vision is clear to be consciously investing in both technology and domain capabilities. This means not just keeping pace with digital world, but thoughtfully choosing where and how we must grow with purpose and precision. At the same time, our focus remains firmly on profitable growth. We are not chasing scale for the sake of it. Instead, we are driving sustainable long-term value for our customers, our partners and our teams. Every step we take is guided by a balance of ambition and responsibility to build a digital business that lasts. We stand before you with immense pride as we reflect on a moment that went far beyond our routine operations, a moment defined by service, courage and nation building by our sellers. During the recent strife in Jammu Kashmir, our sellers took a critical — took on a critical mission to restoring the Army’s fiber communication network. Every team member behind the scenes showed unwavering commitment, ensuring seamless connectivity under the toughest conditions and risks rising to the challenge not just as professionals but as patriots. And to everyone involved, we thank you, we salute you. Your resilience and dedication has makes STL and the entire nation proud of you. At HTL, we believe in leading with responsibility, creating more connected and inclusive world. Since FY ’19, our initiatives in education, women empowerment, healthcare and sustainability have positively impacted millions across India. Through RoboEdge program, we have reached over 6,000 students across 11 schools and are proud that 13 of them represented India recently at the International Robotics Championship in Estonia. Our Jivan program founded by Jodi Agarwal has empowered over 5,800 women artisans in vocational skills with many now showcasing their work under the Archai brand. In sustainability, we installed 4,500 kilowatts of solar capacity, cutting emissions and advancing clean-energy across our facilities. We are working with 53 villages on forestation and water conservation, planting thousands of trees and rejuvenating ecosystems. And through Swastia Suraksha, we have delivered healthcare to over 2.6 million underserved individuals in rural Maharashtra. At STL, sustainability is the heart of everything we do. We are committed to achieving net zero by 2030, which will place us far ahead of our peers in this space. Since FY ’19, we have diverted over 2.6 lakh metric tons of waste from landfills and recycled over 9.6 lakh cubic meters of water, driving through a true resource efficiency. We are proud to be the world’s first optical fiber manufacturer certified for zero liquid discharge and zero waste of landfill. And we have also collaborated with to supply green hydrogen to our manufacturing facilities. Aligned with 16 out of 17 UN SDGs, we’ve positively impacted over 9 lakh lives and earned over 100 plus ESG awards, a testament to our commitment to a sustainable and inclusive future. In the following slides, we will showcase our optical networking business and our focused journey towards becoming one of the top three global players in optical connectivity. We are clearly at a pivotal moment-in-time with three major investment cycles, 5G, FTTX and data centers are coinciding and creating unprecedented opportunities for infrastructure growth across the globe. Starting with fiber to the X, despite a slight global dip, North-America is scaling from 39 million to 65 million kilometers fiber by 2028. Over 100 million US homes await fiber. In India, Geo and Airtel are driving growth via 5G, fixed wireless and bundled broadband. The revenue potential for the telecom operators is between $11 billion to $15 billion annually. In data centers, optical cable demand is set to rise over 26% in five years. The North-America DC market itself will hit $139 billion in terms of total DC spend and India is investing close to INR65,000 crores with a 25% increase in capacity by 2028. 5G is a real game-changer. The target globally is expected to have about 6.3 billion subscriptions by 2030 and covering over 67% of mobile users, 80% of the mobile data will ride-on 5G and you will have over 3.6 billion users with just standalone 5G. The driving forces clearly are data centers fueling long-haul fiber demand, the big techer will invest over $100 billion by 2030. And as the government pushes to connect rural India and rural America, just in India, we expect $2.5 billion of BharatNet Phase-3 and in the US, there is over a $42 billion program for PEED. Further, we will highlight a transformative opportunity that stands before us. The convergence of the AI revolution and the explosive growth of data centers, which is unlocking unprecedential potential across the digital infrastructure space. As we can see, by 2030, the global data center demand will triple to 219 gigawatts with 70% potential AI triggering a $7.7 trillion investment. India is also rising fast. We are doubling our capacity to 1.8 gigawatts by 2026, becoming a digital powerhouse. The backbone of this shift is fiber. AI workloads need almost 36 times more fiber compared to regular workloads, pushing a 70% higher-density and almost a $2 billion opportunity in this decade itself. HTL is ready. We have our Make in India for the world AI/DC portfolio, which offers scalable low-latency GPU ready solutions and which are built for this AI era. And it’s working. As you will see in the numbers, 21% of our growth in DC and enterprise revenue in this quarter. As the global landscape shifts, demand for optical fiber is set to rebound. After two slow years, 2025 mix marks a turning point with fiber consumption projected to grow at 2.7% year-on-year, led by strong US momentum. India’s BharatNet Phase-3 as well as some pockets of demand globally. The medium out medium-term outlook is even stronger. Excluding China, global demand expected to grow at almost 8.2% CAGR with North-America clearly leading the charge, driven by AI infrastructure, data centers and the federal programs that I spoke about like BEAD. CRU, which is a leading agency, agency forecasts 116 million fiber kilometers of demand in this region alone. With a sharp focus on North-America and the global ex-China market, we are well-positioned to power the next wave of digital infrastructure with future-ready fiber and end-to-end connectivity solutions. I wanted us to take a moment to recognize that fiber absolutely continues to be the bedrock of digital infrastructure, whether you talk about 5G, whether you talk about fiber-to-the-home or the AI-led data centers, all of them will ultimately rely on a core base and foundation, which is optical fiber. Industry leaders clearly around the world are making significant bets on fiber deployment and doubling down on making sure that they stay ahead of the curve ramping-up their fiber deployments. Just some of the examples I can highlight here, like AT&T is targeting 50 million fiber connected locations by 2029 and Verizon through its dollar 20 billion play and acquisition of Frontier Communications is pushing forward towards 40 million fiber homes. Back home here in India, Airtel is investing heavily with over 44,000 route kilometers just in one year and is further expanding its data center capacity as well as fixed wireless on the back of optic fiber. Microsoft, one of the large and leading hyperscalers in the world, has already started to innovate with holocore fiber and is looking at how fiber can play a critical role in driving its latency down across its network. Zayo, a very, very large infrastructure — fiber infrastructure provider, has noted a major shift. It has clearly talked about its long-haul fibers, which have jumped from eight to 12 fiber counts in a cable to moving to 144 to 432 fiber counts in just 12 to 18 months, all of it on the back of demand for AI. There are many such examples. These are not just isolated and they’re part of a global movement where telecom operators, hyperscalers and other companies have clearly realized that fiber is the way forward. I’m also proud to share that STL is pushing the frontiers of technology and innovation, we have achieved many global first launched from launching India’s first quantum secured network to with multi-core fiber to pioneering green hydrogen and developing the world’s slimmest optical fiber at just 116 microns. Our innovation engine is strong with 740 patents and 76 new filings in just this year alone. We are building next-gen capabilities with fiber and AI-driven fiber sensing. Our commitment to excellence is recognized with national awards for impactful IoT solutions, social compliance and health and safety excellence. We are making global impact with Baba compliant products from our US facility and Make in India solutions, which are also training European action — European traction made in India and made in Europe for the European markets. How are expanding our optical and copper connectivity portfolio, earning praise for India’s Telecom Minister for our AI-led data center innovations, STL is well set-up for the future. As per CORU data, we have maintained our stable 8% market-share in the global OFC market outside China, a strong foundation as we work towards regaining more ground. But the real highlight is clearly our optical connectivity attach rate, which is up from 13% to 22% in just one year. That’s a significant year-on-year expansion showing a sharp focus on value-added solutions and deeper customer integration.
Now let’s look at the optical Network business, the financial performance. As we reflect on the financial performance of the optical business, in-line with our guidance, Q4 FY ’25 revenue stands at INR979 crores, which shows a healthy improvement on year-on-year basis. EBITDA for the quarter stands at INR125 crores at 12.18% — 12.8% of the revenue. EBITDA margin reflects substantial improvement year-on-year basis, driven by constant focus on the cost leadership. At STL, we are well-positioned to accelerate growth in the optical business. We have scaled-up local capacities and now closer to the markets with strong traction in North-America. Our cost initiatives are showing results and we continue to focus on all ways of efficiency. With 740 patents that I mentioned, innovation drives our data center portfolio and customized solutions, helping us scale the optical connectivity business going-forward. The most recent US-China trade dynamics are also creating new tailwinds for India-led manufacturing, positioning STL to capture rising global demand, particularly in our enterprise business. Now let’s discuss our STL Digital business and its performance. STL Digital continues to bring strong momentum, backed by global presence, a skilled team of over close to 1,200 consultants and a robust order book of INR451 crores as on 31st March 2025. We serve the 26 global customers across key sectors like technology, healthcare, manufacturing and energy, delivering enterprise SaaS, cloud and security, product engineering and AI-driven solutions. Our recent highlights include driving Vedanta’s digital transformation for over 15,000 global users, securing repeat wins across industries and building a powerful partner ecosystem with 40 plus tech partners. Despite a subdued industry environment, we delivered a strong performance in Q4 FY ’25, maintaining revenue of INR78 crores. Our sharp focus on profitable growth is paying-off, SGL Digital’s EBITDA stood at a positive INR5 crores in-quarter four ’25. We remain committed to this trajectory and confident of this momentum in coming quarters.
Let me now introduce Ajay, Chief Financial Officer of STL’s Optical Networking business. Ajay is a chartered accountant with nearly 15 years of experience across fundraising, capital allocation, M&A, treasury management and business partnering. He began his journey as STL as a management trainee and gone through multiple leadership initiatives and heads finance for one of HTL’s core verticals. As CFO, Ajay is focused on driving shareholder value or profitable growth by aligning financial strategy and business goals. On a personal note, I can vouch that he is a very good singer and dancer as well. Okay.
Ajay Jhanjhari — Chief Financial Officer
Thanks. Thank you. Good day, ladies and gentlemen. So I’ll just present the financials of STL for the financial year 2024-’25. What we can see here is, you see the year started on a note wherein we were low on the EBITDA margins, which were around INR44 crore, all-time low of at around 5.2% against our revenues. With the conscious efforts on cost sides, because we were aware that there are some tailwinds in terms of the requirement of our products, we focused a lot on our cost and along with slight market improvement, what we can see is our growth to the EBITDA numbers of INR146 crores. So from the 6% EBITDA numbers for the last quarter of the previous financial year, we could grow it up to 14%. So that is commendable. And going-forward also how we are seeing this is going to be better than this. On the continued operations, we have also been at breakeven or slightly positive on our profit before-tax. In Q4 of FY ’25, we made strong strides with key global wins, we reentered with a major US customer for high fiber count OFC solutions after a year and secured large orders from a leading OSP in America for OFC and optical interconnect products, boosting regional traction. STL Digital also signed a major tech outsourcing deal with a top Indian conglomerate and continued repeat engagements with a leading Indian networking player. Our revenue mix remains robust with EMEA rising to 55% of total revenues and India climbing to 20%. Yeah. Coming on to order book, so our order book is at a healthy state of around INR4,378 INR1,378 crores for the quarter. It is down in comparison to previous quarter because of the less long-term orders we were booked for spot. What I can tell you is that going-forward in Q1, we are looking for a very good traction in our order book. Our order book spread is INR667 crores for the Q1 because majority in our Italian subsidiary and all, we always have spot orders. And going-forward for the next nine months, it is around INR3,710 crore. So we have provided the averaged version of our reported numbers for our review. The net-debt for this business now stands at around INR1,350 crores with a debt-to-equity ratio with a much-improved debt-to-equity ratio of 0.68 times. I would like to tell you that the numbers which we are seeing here is after the demerger, which has happened on the record date of 31st of March 2025. So all the P&L numbers are reflecting numbers of OND plus digital and services numbers will be reported separately in their Board meeting talking about the demerger status of the shareholders and creditors of STL India approved the scheme of arrangement in the meeting held on July 10, 2024. Following this, the demerger petition was filed admitted with NCLT during October ’25. The final hearing date was January 30, 2025 with NCLT Mumbai Bank. The final approval is received and the resulting company STL Networks Limited is now a separate entity effective 31st March 2025. We are in the process of listing of the resulting company shares. We expect to make it happen by June and some — depending on the approval processes, it may likely to extend maximum to July. Sure. Yeah. We’re happy to share the successful completion of significant milestone of our journey, the strategic demerger of LCL’s global services business into Networks effective, 31 March 2025. This move aligns with our goal of portfolio simplification and sets the stage for focused growth in each of the businesses. The entity will now operate under a new and powerful brand identity in. With this rebranding in Venya will concentrate on delivering large-scale digital infrastructure ecosystems, making a bold step into the future. We’re also proud to announce the appointment of Mr Pankaj Malik, a veteran in the industry as the CEO of the STL Networks. His proven leadership and execution expertise positions us strongly to accelerate growth in the next phase. The shareholders of STL Networks have received a one-to-one share entitlement based on the holdings as of April 24, 2025. Together, these developments mark a new era of innovation and opportunity under the Invenia Banner as we move forward in our transformation journey, I’d like to highlight the key focus areas across our core business segments. Starting with the optical business, our mission is to achieve technology and cost leadership and secure a spot in the global top three. We are targeting increased sales in focus markets, boosting optical connectivity attach rates and expanding our data center product portfolio rapidly. In the digital business, our direction is to grow revenue while maintaining a strong focus on profitability, ensuring sustainable progress. In each of these focus areas line to deliver value, innovation and long-term success for all our stakeholders. With this, I now hand over the call-back to Kunal.
Operator
Thank you, Ankit. Ladies and gentlemen, we have now come to the end of our presentation and we shall move to the question-and-answer session. Please note that if you want to ask question, you can click on the raise hand button and we shall take your question one-by-one hey we will take our first-call from Nikhil
Nikhil Choudhary — Analyst
Hi, thanks for the opportunity and congratulations on completing the merger of Global Services business. Ankit, first one on the impact of tariff. It’s been 1.5 months since the US administration imposed tariff globally. Even after rolling back, it remains at 10%. We have seen when Europe imposed about 12%, 13% tariff on tech last year, while we were able to manage our market-share, but I think profitability took some hit, right? And given US itself have a — some capacity in optical fiber, do you think this 10% incremental tariff on India will have some impact on Tech?
Ankit Agarwal — Managing Director
Yeah. Thank you. Thank you, Nikhil. So I think you’re spot-on. We’ve been working. Let me come to the Europe part. There is an appeal that we have filed as well with the European Commission. So that will take its own due process, could be a year, two years process. But we definitely believe on our own merits that we should not be facing any duty in Europe. So that’s something that we’ll continue to work towards. What we have done, of course, and continue to work on is to continue to look at our cost structures, whether it’s in India, but especially in Italy and the US to really make sure that as we are increasing our supply from our local facilities in those geographies, we are making sure that we are more-and-more cost-competitive. So that’s going to be ongoing work even through course of the current year. What we have definitely seen is actually a pretty positive movement. We are continually seeing interest from our customers in the US current and new, who are interested in both sourcing from our US facility, but also our open to sourcing from India. So that balance will continue to happen. And we continue to believe that as the market demand scenario in North-America improves, then also we’ll be able to pass-on some of these costs onwards to our customers. I think all of this will play-out broadly in the next one to two quarters. Of course, the 10% itself is there currently for three months. Let’s see how that gets played out. One thing we have seen and I called that out earlier is that especially some US customers who are dependent on certain products on the enterprise side and copper side, et-cetera, who were single-sourced from China or majority sourced from China, they are definitely seeing STL as an interesting opportunity to partner with for some of their large requirements.
Nikhil Choudhary — Analyst
Got it. Okay. Second one on growth recovery. I think have lost some market-share globally from, let’s say, 11% to 8% now. Do you have any timeline in mind where we can get back to that particular market-share, especially in context that so what you have mentioned that we are seeing some demand recovery. Although Ankit, we are yet to see those recovery in order book number. So any color there as well?
Ankit Agarwal — Managing Director
Yeah, absolutely. So I think, look, broadly, we are very well set-up with our capacities, you’re familiar with all the capex we’ve done over the last several years. And broadly, we’ve been operating at that about between, say, 40% to 50% utilization. So I think all the investments are done. We are working pretty well on our product portfolio. The US facility is now up and running well. So I think all the base is now well set for us to — as this demand is now starting to come back, I think we’re very well-placed to increase our utilization. And as you’ve seen that as we just go back from, say, 50% utilization to 70% utilization, our EBITDA margins will basically go from about 14% currently to about 20%. So that’s really where the focus is to generate that EBITDA and then to generate the cash. From a market-share perspective, I think definitely we will look to increase our market-share globally. I won’t comment on specific targets, but I would say that we are committed towards that vision of being top three in the world. I think that will take us probably somewhere between three to five years, but that’s really where we want to get towards.
Nikhil Choudhary — Analyst
Oh, just a small one, Ankit, last one on beat project. I think your new US administration has made some changes in beat program. Do you think this changes will lead to further delay and moreover — more or less now looks like beat demand will flow-in sea by ’26?
Ajay Jhanjhari — Chief Financial Officer
Yeah. I mean, I would say that it’s really a lot of things happening in parallel, as you can imagine in terms of the legal side, in terms of discussions happening with various stakeholders. What we understand broadly is that there is conversations around when does the — when does the beat finally get formalized, when does it start getting rolled-out and how much of it is fiber versus, say, wireless or satellite? So all of those conversations are happening. I think in-principle, there is a push also as well to take it forward and conclude it. From our own business planning perspective, we’re largely seeing this as probably a Q4 this year or a Q1 event next year. So we’re not — from our planning perspective, we’re really looking at our current customers and new customers to drive the growth. One positive thing also that we do expect is that the permitting process in the US will start getting simplified under this new regime and that could actually also help then accelerate both the regular build-out as well as government-funded build-out.
Nikhil Choudhary — Analyst
Got you, Tankit. Thanks a lot and good luck for coming to it.
Ankit Agarwal — Managing Director
Thank you.
Operator
Thank you, Nikhil. Dear participant, we would request you to mention your organization name along with your introduction. We’ll take next question from Balas,
Balasubramanian — Analyst
Thank you so much for the opportunity. I’m Bala from Capital. Sir, my first question regarding data center side. Earlier if I mentioned about 25 percentage of revenue is expected from data center. I just want to understand what kind of like products we are having, what kind of launches in upcoming years and what is the strategic focus on data centers? And if you could share some lights on that demand and supply-side for especially our products and data center.
Ankit Agarwal — Managing Director
Yeah. Yeah. I think, while thank you for the question, we’ll be able to only share some information at this stage because we are still, I would say, in advanced stages of building out our product portfolio. I think what we’re really looking at is how do we build an end-to-end solution on — on the passive connectivity layer for the data centers. We have already worked on and build a good portfolio for interdatacenter connectivity, which is connecting data centers within a campus. We are now working on technologies and portfolio for within the data center. I think that’s something that’s a very exciting opportunity for the company. And as I’ve shared in the last few calls, this is something that we are prioritizing on how to build-up the portfolio, probably start with a few geographies and then also take it global. This is a market which we definitely believe will continue to grow over the next five to 10 years globally. India market, as I just shared, will also look to double in terms of the sheer megawatt capacity or gigawatt capacity that is coming up in India. So from all of those conversations and discussions with market, we do believe that this is a very positive opportunity for the company. And also if you look at the capex cycles of telcos, which typically go up-and-down every few years, the data center spend itself will be a nice hedge for us vis-a-vis just the telco spend. So I think from those aspects, this is a very good opportunity for the company. As we’ve set-out a target, 25% of our revenue should come from the data center plus enterprise segment and that’s definitely something we’ll move towards in the next few quarters.
Balasubramanian — Analyst
Got it, sir. Sir, my second question on the inventory side, how are the — how are the inventory levels on the global, especially in the North-America and we have seen some like very big wins in order terms. And another thing I want to understand the pricing side of our optical fiber and optical fiber cable side on the industry’s level. Whether we have seen recovery on the prices?
Ankit Agarwal — Managing Director
Sure. I mean, the pricing has been flattish. There’s nothing specific. I think now with the demand growing in North-America and also in India with BharatNet which is — which will kickstart across all the packages. So I think from that perspective, probably I think pricing has bottomed-out and should start improving. It will take some time directionally, but I think that’s where it is at. I think from what was the first question?
Balasubramanian — Analyst
Inventory levels.
Ankit Agarwal — Managing Director
Inventory levels, yeah. I think inventory levels, we broadly seen, I would say, broadly last 18 months, maybe even 21 months a drawdown of that inventory. We’ve been sharing that update in our calls. I think it’s probably — we’re largely done now with the excess inventory in the system, largely in North-America. There’s probably some pockets of some inventory probably for another quarter or so, but largely we do see and hence, we are starting to see more opportunities in our pipeline and we do expect good movement on new orders in the coming quarters.
Balasubramanian — Analyst
Yes, sir. So a small quick question on the program like I think it is expected to start from in this financial year. I think the opportunity see I see is more than $40 billion. And I just want to understand like what’s the timeline is given by that government and is there any plan?
Ankit Agarwal — Managing Director
As I said, Bala, because it’s — there are lot of moving parts in the US right now in terms of this project itself. Of course, principally, we do believe the projects moving forward, it’s — it’s been committed by both houses. I think some of the nuances around how this gets panned out, how much is fiber versus wireless or satellite, some of that detailing will probably get clarified. But as far as the states are getting prepared to receive the funding at state-level, I think all of that is moving forward. But from our own perspective, I was just sharing that we do think that this is a Q4 this year or possibly even Q1 next year event.
Balasubramanian — Analyst
Got it, sir. Thank you.
Ankit Agarwal — Managing Director
Thank you.
Operator
Thank you,. We’ll take our next question from Mr Arun Malothra.
Arun Malhotra — Analyst
Yeah, thanks for taking my question. This is Arun from. I think a lot of my questions have been answered, especially on the — on the margin front and the pricing. But still like to understand you have, you know, given a lot of demand factors in favor of the industry, especially the 5G, the AI, the data centers. What is the supply-side scenario? That’s one. And where do you see the pricing? Because we are not seeing the prices going up. So the margin from 13% to 20%, does that capture the price rise or is it just the operating leverage which you are factoring in?
Ankit Agarwal — Managing Director
No, good question, Arun. Thank you. I think there’s two, three elements to this. I think principally, what I said is just in terms of utilization itself, right? So we’ve been operating broadly at this 40% to 50% utilization. Our facilities have been pretty well set-up globally. So I think as we just see the markets, these inventories, which I spoke about coming down, our volumes going up globally and particularly in the North-America market, I think that will help drive our utilizations up and help us improve our profitability. I think on-top of that will be that especially in some select markets, we do expect the realizations to improve. It might take a couple of quarters, but we do see if we go by past trends that in such market scenarios, the realization should also improve marginally. I think in India market, specifically coming to that, yes, prices have been flattish, prices have been on the lower-end. But again, here I do believe that with the demand growing with, we do expect the fiber prices and ultimately the cable prices to go up maybe marginally, but that’s tough to predict at this stage. The projects itself will be deployed over three years. So fairly short timeframe for a massive fiber network that needs to get built-out and so we do expect a healthy demand in India as well.
I think overall on supply, I mean, I wouldn’t say there’s any major movement. We have seen lower demand locally in the China market since a lot of their 5G and maybe fiber-to-the-home is done. There is a lot of replacement fiber that’s happening because China built its networks more than 15 20 years ago. So we are seeing some of that demand. But from a supply-side, actually, we’re seeing some consolidation in the China market. Some of the larger players are consolidating and we do see that the market should become healthy probably in China over the next one to two years.
Arun Malhotra — Analyst
Yeah, just a clarification, you said 13.5 to 20 you want to reach. What’s the timeframe which you are looking for?
Ankit Agarwal — Managing Director
I won’t comment on a specific time-frame, but I’m just saying directionally through the course of this year, we — as our volumes improve quarter-on-quarter, we do expect to move towards that range.
Arun Malhotra — Analyst
Sure. So my second question is on the and the Bharagnet program, especially for, our observation, just correct me if I’m wrong, our — my observation is that our order wins have been much lower than the competitors. So any comments on that?
Ankit Agarwal — Managing Director
Just to clarify, Arun, we have won a project in Jammu, Kashmir, which is cumulatively of you know, including the deployment as well as maintenance for 10 years, that is close to about INR2,600 crores, all included, taxes, everything. So that is the project that we are taking on-board. This is part of the services business which is now demerged. So I just want to clarify that. So — and that will — this project will be part of that business. So the order book that Ajay spoke of earlier, this is excluding that project and of this will — once we get the purchase order in that entity, then it will be part of that order book. For this business, which is the manufacturing business, we will certainly speak with all the various winners of the various packages and look to maximize our share across cable, fiber and connectivity.
Arun Malhotra — Analyst
Sure, sure. And lastly on the debt part, any — what are the plans to reduce the debt?
Ajay Jhanjhari — Chief Financial Officer
Okay. So see, see if you see the last years, we have improved our leverage ratio significantly. As on — now our ratio as on 31st March ’25 stands at around 3 with the cash generation from the business, which we have demonstrated in the previous year as well, we expect to touch down to two by end of this financial year. And the major driver — driver for this would be the cash generation, which we will earn from the business by increasing our EBITDA margins by the better utilization of the capacities.
Arun Malhotra — Analyst
Sure. And lastly, is the management concerned about that the shareholder — share equity returns for the minority shareholders because if you see you of being the leader in this segment, 8% global market-share, but the equity returns for the minority shareholders have been pathetic. Any comments there?
Ankit Agarwal — Managing Director
Yeah. So see what we believe is that there is a lot of value in the stock. And once we start improvising on our margins, it will definitely start reflecting. In order to generate that consistent shareholder value, what we are doing is that we are focusing to grow our optical business and build STL Digital. Our one target to have a attractive leverage ratio. So we have already planned and we are on the target to deliver net-debt to EBITDA below 2, which is going to work significantly well. I would also like to update you that in the last year, we have prepared ourselves for the better markets and better capacity utilization. So we have done a lot of things on our cost side. Now it’s a time when the market starts picking-up, our margins will automatically grow further, which will help us in creating a lot of stakeholder value.
Arun Malhotra — Analyst
Yeah. Sure. Thank you and good luck.
Operator
Thank you, Arun. We’ll take next question from Ranjay Popli. Ranjay, please go.
Ranjay Popli — Analyst
Great. Thank you
Operator
Sanjay you can ask your question Ranjay
Ranjay Popli — Analyst
Am I audible?
Operator
Yes.
Ranjay Popli — Analyst
Hi, thank you for the opportunity. I just wanted to ask a question regarding international peers, especially in US. They have mentioned in their calls that the inventory digestion has taken place and they are seeing good demand, particularly in the US. So any comment on that?
Ankit Agarwal — Managing Director
Yeah, absolutely, Anjay, it’s exactly what I shared earlier as well that we have seen probably it’s taken 18 21 months or so for the excess inventory to come out-of-the system. I think most of that is done probably this quarter or so is what’s why we see this. But we are already seeing in our pipeline of opportunities of whether there are more opportunities coming for HTL, both for supply from our US facility as well as from India. So that — that is definitely aligned with what we are seeing as well.
Ranjay Popli — Analyst
Okay. Thank you.
Operator
Thank you, Ranjay. We’d like to remind our participant that if you wish to ask question, kindly click on the raise hand button and we shall take your questions. Next, we will take question from Saket Kapoor.
Saket Kapoor — Analyst
Yeah, Namaskar, sir, and thank you for the opportunity and welcome, Ajajiv, your first interaction with the investing community and all the best to you for.
Ankit Agarwal — Managing Director
Thank you.
Saket Kapoor — Analyst
Sir, firstly, sir, if you could just give us some understanding what — what goes into currently into the consolidation earnings when we are reporting standalone and consolidation, if you could just provide to us which bits of businesses and the geographies goes into consolidation? And secondly, as interconnect part of the story was mentioned by MPG that the pie has changed. So what have been the revenue and the profitability contribution from interconnect part? And third question is about the fiberization of our — of the towers. So what is the update on — since I think so all the telcos are speaking about 5G rollout and successful rollout all across the country, but we have not seen that kind of fibilization happening as earlier reported that our towers are under fibilized. So what is the current understanding and what is the way forward from players like us sir? These are my other questions.
Ankit Agarwal — Managing Director
I’ll take the third one.
Ajay Jhanjhari — Chief Financial Officer
Yeah.
Ankit Agarwal — Managing Director
I’ll just start with the third question, Saket jee. So I think, see, principally we are — we definitely see both in India and globally that as you move from 4G to 5G, you need much higher tower fibilization, which means fiber directly from tower to this black hole. So that continues to be a trend in India as well. We are seeing that all the operators as they are increasing their 5G network, both coverage and capacity, that trend continues. What we are also seeing is that operators are looking at a end-to-end fiber network for all their requirements, whether it’s fiber-to-home, fiber to enterprise, fiber to fixed wireless point or fiber for 5G. All of this is converging towards one fiber network. So we continue to see, I would say, a reasonable amount of fiber getting deployed by the telcos. I think as I said, the next big kicker will be the BharatNet Phase-3. What has been launched so-far is by the central government. On-top of that, we also expect a few more states to launch their own BharatNet Phase-3. So I think there’ll be multiple opportunities, which ultimately will take the fiber to every village in India. What we ourselves are taking responsibility for in Jammu Kashmir will be to take fiber to every village in Jammu Kashmir. So I think this is a good opportunity for the country, great service to the country. I’ll ask Ajay for the other two questions.
Ajay Jhanjhari — Chief Financial Officer
Yeah. So on your first question regarding consolidation, so I would like to make clear that we demerged on 31st of March ’25. So the financials, the P&L piece of service business will be reported under the new entity, which is STL Networks Limited. We are going to schedule a Board meeting for that as well, which is more likely to happen in next two to three weeks. And therefore, the financials which you are seeing currently consists of optical networking business and our digital business. I hope it answers the question.
Saket Kapoor — Analyst
No, sir, my point — sorry, sir. Sorry to interrupt you. My point was for the optical network business consolidation, we see revenue of INR979 crore. And when we look at the standalone numbers, they are lower than that. And even the losses, they are higher. So I think so these are — these are carved-out number only for the OBM business. So I —
Ankit Agarwal — Managing Director
Yeah. so because in our consolidation, there are multiple entities which operates outside India. So we have our wholly-owned subsidiary in Italy, which is Metalurgica, then we are having our own plant in US, which is STI US and then we are having our one plant of draw in China as well. So that is why you are seeing different numbers in consolidated — consolidated numbers and standalone numbers. I would also like to remind you like 70% — 75% of our ONB revenue comes from the international market. And therefore these factories are set-up there.
Saket Kapoor — Analyst
Correct, sir. So going ahead, sir, if you could just provide that split also, so we can get the understanding how the other geographies are also performing that would have been better and
Ankit Agarwal — Managing Director
What we do, Saket, is actually give you a revenue split. We don’t provide more than more information for competitive reasons.
Saket Kapoor — Analyst
Correct, sir. And next question on interconnect, sir.
Ankit Agarwal — Managing Director
You were answering. So on interconnect, like you must-have seen, we — our attach rate, which was 13% in the last financial year has increased to 22% in the current financial year. This interconnect business, we are very optimistic upon. It has shown a decent growth in the last financial year, almost increased by 30%. And this is a very profitable business with a better ROCE. And what we are doing right now is to expand it further in the other markets where we were not supplying it earlier. So we are very optimistic on it. We are also in-process to evaluate whether we need to spend some amount on it on the R&D activities to grow this business further. Yeah.
Operator
Thank you,. We’ll request all the participant to restrict the question to one, so everyone gets an opportunity. Next, we’ll take question from Harshit.
Harshitt Kadga — Analyst
Hello, am I audible?
Ankit Agarwal — Managing Director
Yes.
Operator
Yes.
Harshitt Kadga — Analyst
Thank you for the opportunity. Sir, what kind of revenues are we expecting from BharatNet in FY ’26 and ’27. Ashit, again, this is just to clarify from STL perspective, we are looking at the manufacturing of the cables, the fiber supply of fiber to other cabling companies as well as the connectivity products. I think it’s still early for me to give a specific forecast in terms of the market in terms of the demand as well as then what share we can take. For us, from my perspective, basically, as I said, this is a three-year deployment, which will kick-off soon. There are some packages which have been awarded already, some packages still to be awarded. So I think that will take a little bit of time to clear all that out. Once the people have been awarded the package, then we will be negotiating with the various winners. We have our own consortium partners and we’ll be negotiating with them to see how we can best serve them. Clearly, our intent would be to have a good market share across the packages, including the package that we have won in Jammu Kashmir. So I think it’s a bit early today to give you any forecast like this, but be rest assured, we are putting our efforts to get a good share. Thank you.
Operator
Thank you, Harshitt. We’ll take next question from Adity Jawar, requesting participant to mention the organization name as well.
Aditya Jhawar — Analyst
Yeah. Thanks for the opportunity. I have AK Investments. Firstly, I would like to say to the management that as investors, we are going through a lot of pain still tech from last, I mean, five to six years. And now we have demerged as a company. Now I understand this will be a manufacturing part of PL, where we are having currently optical fiber and optical thing which is at most commodity when we say because the prices doesn’t it is a global thing, right? So as an investor, how do you see we are shaping STL tech going-forward? That is my broader question. We’ll be focusing on the manufacturing part, I mean building hardware manufacturing or because Tatas or HFCLs, right? They are the late entrants in this market and they are capturing the market-share. And we’ve been the pioneers from last 20 years. And in the last 10 years, we have been burning cash, thousands crores of writes off and we are going through this pain. So how will you take-up the responsibility? That is my first question.
Ankit Agarwal — Managing Director
Good. I mean, just to clarify, there wasn’t any INR1,000 crores of write-off, I just want to clarify. But on a serious note, I can do investment. Yeah, but okay. Yeah. I just want to fully appreciate that we are all accountable as leadership and management to create value for our shareholders and be rest assured that that’s what we’re fully committed to. To just reflect a little bit on our journey, we’ve over the last three to four years actually shut-down several businesses, including we had looked at wireless solutions, we had looked at OSS, BSS Solutions and many others, which have exited some businesses we’ve also been able to sell and bring the cash-in. As we saw our balance sheet also over last — in April last year, we did a QIP of close to INR1,000 crores to make sure that our balance sheet was in the right shape. And I think we have invested in our capacities. I think what I can definitely tell you with confidence is that we are very, very clear about our strategy and our focus of what to do and not to do. We are clear that our core business is the optical business. We are going to be world leaders in this business. I would disagree with you when you say that this is a commodity business. This is a high-technology manufacturing business and I would urge you and any of our shareholders to visit our facilities in India globally. It is truly cutting-edge technologies that we create and along with our optical connectivity and now our data center portfolio, which is coming up. Our whole thought process is to compete and be the best solution provider with — for our customers. We truly believe that we will win on technology and we will charge a premium for our solutions for the value they offer to our customers. That’s really the thought process. We believe that this can help us drive better profitability and also we will be very focused on generating cash and reducing our leverage going-forward, as Ajay said. So that is the commitment from our side. That’s where our focus is and we are really looking-forward as now that we see the market conditions also improving, how do we make sure that we get the right market-share at the right pricing and also generate cash?
Aditya Jhawar — Analyst
Okay. Thank you. Great. Thank you. One more just follow-up. Just one follow-up
Operator
You to come back-in the queue for the follow-up. We’ll take the next question from Pratap Maliwar.
Pratap Maliwal — Analyst
Hi, am I audible?
Ankit Agarwal — Managing Director
Yes.
Pratap Maliwal — Analyst
Hello.
Operator
Yeah, yeah. Yes. Your question.
Pratap Maliwal — Analyst
Yeah, yeah. Thank you. I’m here from Mount Intra Finance. I just wanted a clarification regarding your statement on the Chinese market and the demand that maybe there’s lower demand in China and you see that kind of stabilizing. I just wanted some more color on that and how that affects our business in particular. Is it that because of lower demand, because China is a large producer, they are players tend to dump more in the international market and that kind of heats into our share or what is the outlook here on the Chinese market, please clarify?
Ankit Agarwal — Managing Director
I see, I was just — the question was on what’s the supply, right? And so I think we must understand 50% of the world market demand, if you look at the past charts, historically, the demand and then the supply is 50% of the world market has been China, right? That’s the sheer volume that the three telecom operators out there deploy. And they’ve been building out a massive network. On a given year, China deploys 12 times amount of fiber that India deploys. That’s been the kind of build-out they’ve been having. What we now see is that a good portion of the network has been built-out for 5G as well as fiber-to-the-home to the major cities, which is where then I commented that we do see some decline in their own demand year-on-year now and probably going-forward. But as a result of which also there has been a consolidation in suppliers in the China market. So we do see that as a healthy sign and we do see that the pricing also in China has bottomed-out and should normalize going-forward. That was the feedback. Impact to STL, I don’t see with the way the markets that we serve, particularly in North-America, Europe and in India, which are our focus markets, we don’t see a lot of competition, particularly on the cable side from Chinese, but in some places, they do serve and they supply fiber at lower-cost. Again, that was my point earlier that our whole thought process is to compete on technology and on solution. So the more we are able to supply our customers with cable and connectivity together as a solution that will be a big advantage for our company going-forward.
Pratap Maliwal — Analyst
Okay. That’s it from my side. Thank you.
Ankit Agarwal — Managing Director
Thank you.
Operator
Thank you, Pratap. We’ll take next question from Rohan Patel. Rohan?
Rohan Patel — Analyst
Hello hello
Operator
Yes, Ron, you’re audible.
Rohan Patel — Analyst
Yeah, yeah, yeah. Thanks for the opportunity sir since last couple of quarters, you were talking about the inventory clearing out and now you are firmly believing that inventory is mostly cleared out in America and things are way better than it was for like 12 months before or 18 months before. So considering that you are also investing in new products and spending money in R&D. So how do we look at technology from here on for? Like can you just give us a landscape for next three to four years about like how much you want to grow your top-line as well as your bottom-line? Because you have fairly talk about balance sheet side, if you can give us sense about how things will move on from here?
Ankit Agarwal — Managing Director
Yeah. Thank you, Ron. We don’t typically give a forecast, so I won’t be able to give you any specific numbers. I think three, four things that we have shared, I’ll just reiterate that. One, directionally, we have a vision to be World Top 3 three. I think that’s clearly means fairly strong growth over the next three to five years for us overall, particularly in the optical business, number-one. Number two, we are fully invested into our capacities in terms of all the way from glass to fiber to cable and connectivity. So we do feel that we are well-invested. I do see that over the coming quarters, our utilization of the factories will go from, say, 50% to 70% plus. And as that happens, we will move towards at least 20% EBITDA margin. So these are — these are two or three things that we have shared. And as Ajay also shared, just now, we are also looking at reducing our leverage ratio from about three times to about two times. So as we start generating cash, utilizing that to reduce our debt. I think that is where we take the business going-forward. I think principally the one other growth area we’ve talked about outside of the core telco segment is the data center segment. That’s a fast-growing market and where the amount of fiber used inside a DC continues to grow. So we are building out our portfolio and going-forward, that will be an important — important and profitable segment for HTL to grow within okay.
Operator
So can you come in the queue again?
Rohan Patel — Analyst
I just have last question. I just have last question. Considering that you are talking about fiber deployment in India and as well as in America. So do you find there has been change in industry dynamics or there could be change in industry dynamics after the entry in India?
Ankit Agarwal — Managing Director
No, we are — and that’s why I had that slide, particularly on literally every telecom operator and other players, hyperscalers talking about it. There’s no question in my mind or in our industry that fiber will remain the core. There will be applications for Starlink or other satellite operators on the fringe where they’ll be able to — where there’s absolutely it’s unviable for fiber to be deployed there from a cost perspective or otherwise. In those regions or applications, they will probably be used for satellite. But across-the-board, I think for majority — a vast majority of connectivity, the base will continue to be fiber going-forward.
Rohan Patel — Analyst
Okay. So not a major impact on our business.
Ankit Agarwal — Managing Director
No, we don’t see that.
Rohan Patel — Analyst
Okay. Okay. Thanks. Thank you for this opportunity and answering all the questions. Thank you.
Operator
Thank you, Rohan. Ladies and gentlemen, with this, we now come to the end of our question-and-answer session. And now I hand over the call-back to Ankit for the closing remarks.
Ankit Agarwal — Managing Director
Thank you all for joining our call today and for your continued interest in SGL. Despite a challenging market environment, we have made meaningful progress on our strategic priorities. Our focus remains on what we can control, deepening our customer-centricity, fostering a lean and agile organization and driving growth through technology leadership. We continue to actively pursue opportunities in our key markets, leveraging our advanced manufacturing, innovation capabilities and an industry-leading product portfolio. As the market demand stabilizes, we are well-positioned to execute with discipline, deliver strong results and create lasting shareholder value for everyone. We hope your questions and comments were addressed today. For any further questions, please feel free-to reach-out to the Investor Relations team, including myself. We look-forward to staying engaged and continuing this conversation in the near-future. Jahen?
Ajay Jhanjhari — Chief Financial Officer
Thank you.