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Jio & Airtel fiber-to-the-home will be the next growth opportunity for us, says Sterlite Tech

Updated : August 23, 2019 12:08 PM IST

The fibre-to-the-home (FTTH) market is heating up in India with Jio's launch on the anvil and Bharti Airtel also reportedly prepping its plan. Anand Agarwal, the group CEO of Sterlite Tech, shared his views and outlook on how this will impact the company as well as the entire industry.

“Globally we have seen that the FTTH is at a great propagation and in India with the Jio announcement of 20 million homes and 15 million enterprises, it is going to be the next phase of growth and capex that Jio does,” Agarwal said on Friday.

“For a company like us, which is fully integrated from silicon to fibre, it is clearly great news. Airtel is also looking at both the tower fiberisation for better connectivity of 4G as well as FTTH. All in all, it is pretty good news for us as we look forward,” he added.

Speaking about margins, Agarwal said, “Our margins are a mix of the two macro business area. So there is a business area which is more products and manufacturing-focused which has about 24-25 percent margin. Other one, which is services which has lower margins but the better return on capital employed. So for us, in Q1 we had the mix which was more skewed towards the product sales and hence we had about 22 percent margin, which is equal to the annual margins that we have been doing. Between 20 percent and 22 percent is the right spot for us.”

When asked if there are any delays in payments from customers like BSNL, he replied, “There is a small amount of supply that we have made to BSNL directly which has some delays but the bulk of our payments or on the work that we are doing is for defence, the payments are coming clearly through. About Rs 200-250 crore of stuff that we had done for BSNL about a year ago, it is coming through but it is coming slowly.”

 

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