The Company has two major business verticals 'Telecom Cables' and 'Power Transmission Cables'.Their main business is in manufacturing of optical ï¬bers, fiber optic cables, copper telecom cables, structured data cables, power transmission Conductors, aluminium and alloy Rods. They are also into Telecom systems and solutions and Power transmission network ownership. Sterlite Technologies has offices in 11 countries. It is among the top 5 global manufacturers of optical fibers and cables and top 3 global manufacturers of optical cables.
Geographical Areas of operations
They are headquartered in Pune, Maharashtra and have eight manufacturing plants in various locations in India. They have operations in China, Denmark, India, Netherlands, Russia, Saudi Arabia, South Africa, Turkey, United Arab Emirates, United Kingdom, United States of America
The company has offices in 11 countries. Sterlite Technologies will be forming a joint venture company with optical cable solutions provider Jiangsu Tongguang Communication.
Board of Director
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CEO and Wholetime Director
Non-Executive and Independent Director
A R Narayanaswamy
NonExecutive and Independent Director
NonExecutive and Independent Director
CEO &Wholetime Director
K S Rao
COO - Telecom
COO - Power
Sr VP - Human Resources
AVP - Finance
Key industry players
The two main components that can be used for peer identification are product manufactured and the company's revenue in comparison to that of Sterlite technologies
Major Indian and Global competitors of Sterlite Technologies include Corning, Commscope, Draka, Finolex, Furukawa, General Cable, Midal, Nexans, Prysmian, Sumitomo, Apar, etc.
Sterlite remains a market leader with a 30.8% market share as compared to Finolex that has a market share of 21.6%.
The Indian companies that can be used for comparison are
If comparison to international companies is required then included Prysmian or Commscope can be considered.
The Company is controlled by the Agarwal Group; being a group as defined under the Monopolies and Restrictive Trade Practices Act, 1969. The list of entities in the group is as under:
1. Volcan Investments Limited, Bahamas
2. Twin Star Overseas Limited, Mauritius
3. Mr. Dwarkaprasad Agarwal
4. Mr. Agnivesh Agarwal
Stock exchange listings
â€¢ National Stock Exchange (NSE), India - Scrip Code: STRTECH
â€¢ Bombay Stock Exchange (BSE), India - Scrip Code: 532374
P/E, Profit margin, Revenue and Profits are the key financial indicators.
Non Financial Indicator
Patents: It has a portfolio of 30 patents granted in USA, Europe, India & China.
Capacity: Its projects are underway to double the annual optical fiber manufacturing capacity to 12 mn fkm, triple fiber optic cable capacity to 6 mn fkm and enhance power conductor capacity to 1,60,000 metric tonnes.
Joint Venture: Possibility of new joint venture can be key indicators for a company's growth.
Vision " To connect every home in the planet"
Mission "To make it easier, faster and more cost-effective for service providers to build telecom and power infrastructure, by partnering with our customers to deliver optimal solutions for evolving needs."
Sterlite believes in sustainable development and believes greater responsibility is required for overall wellbeing development of Society. It tries to take into consideration social and environmental conditions that would influence its business in the long term. It tries to make an impact on the environment through use of technology.
(g) Agency Issues
Post the demerger from the parent company the agency issues are resolved. Now that its decisions are not dependent on the larger holding. Sterlite Industries still has a stake of 1.2% in the comapny
Always on Time
Marked to Standard
Foreign promoter Holding: Due to high foreign promoter holding the groups decisions might not be in favour of the publicly traded shareholders.
Promoter and Management: Presence on Aggarwal family on the board as well a shareholder would lead to conflict of intrest. They are also holder of Share
Joint Ventures: the company is entering into joint ventures in China. This joint venture would have the same products as that of the parent company. They might be even competing in the same market space.
(i) BT500 list
The rankings of Sterlite Technologies in the last four years according to the BT500 list:
2007- Rank 297
2008- Rank 333
2009- Rank 289
2010- Rank 184
The company's rankings have went down in 2008 before it improved in 2010. The fall in 2008 rankings could be due to the recession. In 2010 due to strong order books and expansion plans the company has improved its position. If in 2009, the improved rankings can be attributed to the contracts with BSNL. Improvement in 2010 to 184 can be attributed to the stronger fundamentals and higher growth of the industry.
The only other peer listed in the BT500 list is Finolex and its rankings are given below:
2007- Rank 299
2008- Rank 406
2009- Rank 461
2010- Rank 471
Finolex on the other hand has not been able to capitalize on the existing
Birla Ericcson and Aksh Optifibre do not feature in the top BT 500 list. A reasoning could be the way the ranking is compiled. These companies do not have a very high market capital and could be the reason for exclusion from BT 500 list. Hence, revenue growth or increase in market share does not qualify a stock to enter a BT 500, they need to have a high average market cap to be included.
j) 'retirement' portfolio for the next 25 years
If we observe the entire portfolio of the companies it can be identified that Sterlite is the market leader. More over it has a diverse portfolio of telcom as well as power cables.It is the only fully integrated optical manufacturer in India. This integration helps the company record close to35% operating margins. On the other hand its order books are dominated by PSU companies. In telecom cables sector, the technology is changing at a high speed and as it becomes commoditized there can be an adverse impact on its pricing curve. A wrong move in adoption of a particular technology can have serious repercussions.
Hence for the long term it would be better to invest in the market leader as it has better chances of surviving adverse conditions. Hence the best investment option id Sterlite Technologies.
k/is your company a repeat performer (in terms of ranking). If yes - why? If
no - why? (please probe this question to the extent feasible)
The company has constantly shown a operating margin of more than 10% as compared lower operating margin of Finolex. The company has increased its capacity in 2007. The ccompany has expanded its optical fiber capacity from 1 million km in 1997 to 12 million km in 2009 indicating strong growth.
l) key finance people
Anupam Jindal joined the Sterlite Group in 1998 and has since then worked with the Group's aluminum foils and copper telecom cables businesses before heading finance and accounts at Sterlite's mining operations in Australia. His key focus areas have been finance, treasury, accounts and MIS. Anupam is a chartered account from the Institute of Chartered Accountants of India.
Dharmendra Jain joined Sterlite in 1997 and his key focus areas are finance, treasury, taxation, accounts and MIS. During his 17 year career, Dharmendra has been associated with Indian Aluminium Cable Ltd. (HDC Group), among other prominent organizations. Dharmendra holds a degree in chartered accountancy from the Institute of Chartered Accountants of India.
(m) Job Openings on Company Website
Job Title: Chartered Accountancy
Key Skills required are Finance, accounts, CA, MIS. Job Description includes Accounts, taxation, audit, banking & finance, business analysis, financial modeling and MIS.
The job is posted on Sep 08, 2009. Most likely the website has not been undated as the posting is more than a year old.
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