Sterlite Tech MD asserts strong case for zero duties in EU anti-dumping case; expects company performance improvement

Ankit Agarwal, managing director, Sterlite Technologies Limited

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26 Aug, 2025 12:21

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Home-grown Sterlite Technologies Limited (STL) has appealed to the European Commission against imposing anti-dumping duties on Indian optical fiber cable (OFC) manufacturers, asserting that it has a strong case for zero duties.

The OFC maker expects its overall business to start improving and swing back to profitability in the coming quarters.

“....these are provisional duties. We do believe that, on merit, we have a strong case, for ideally zero duties or lower duties, and we are appealing our case with the European Commission,” Ankit Agarwal, managing director of STL, told Moneycontrol in an interaction.

After a six-month investigation, including being physically present at the factory premises of Indian OFC makers, the EC decided in June to propose provisional duty on as many as ten companies, including STL, Birla Cables, Universal Cables, Vindhya Telelinks, ZTT India, UM Cables, Aksh Optifibre, Apar Industries, Polycab India, and Aberdare Technologies.

HFCL, however, was excluded from the decision as it was found to follow fair business practices.

STL has a large OFC manufacturing facility in Italy, which it scaled up through the Metallurgica Bresciana acquisition. “We are very well set up in Italy with this facility for all the European requirements. So, we don't see any impact on the business per se, but, of course, we would want to ensure that from a future perspective and from having the flexibility of operations, we will continue to pursue our case very strongly,” Agarwal said.

While continuing to pursue its case in the EU region, STL anticipates benefiting from the Indian government's decision last year to impose a definitive anti-dumping duty on certain optical fiber imports from China, South Korea, and Indonesia.

“...there has been a good imposition of duty, and I would still say that probably there is an opportunity for the government to look at that and see if that could be increased further. But, we are also seeing that there are strong guidelines for essentially make-in India, and so, we are confident that for the India requirements, particularly the government-funded projects in India, there will be a strong requirement for made-in-India both fibre and cable,” Agarwal said.

Sterlite Technologies reported revenue at Rs 1,218 crore in Q1 FY25 against Rs 1,522 crore in the previous fiscal year during the same period, dragged by lower OFC volume. It posted a loss of Rs 47 crore in the first quarter, against a profit of Rs 46 crore in the previous fiscal year during the same period. The EBITDA margin stood at 7.6 percent again at 15.4 percent in a year earlier period.

STL expects its overall business to start improving and swing back to profitability in the coming quarters as high inventory levels in the US—a key priority market—reduce and start to normalise. Its focus on improving capability utilisation across factories to improve volumes and cost optimization will also help it post profits in the coming quarters.

“We expect the company's performance to improve quarter on quarter. The biggest trigger will be improving the volumes by improving the capacity utilisation of our factories. Secondly, we continue to focus very strongly on our cost optimization, including looking at all elements of costs, supply chain logistics, raw material costs, people costs, and all our other fixed costs,” Agarwal said.

He added that STL’s management focuses on ensuring that the business eventually runs at at least a 20 percent EBITA margin.

In India, the company is counting on the Rs 65,000 crore BharatNet Phase 3 project to drive growth in the coming quarters. Additionally, the need for telecom companies to connect towers through a fiber network, known as fiberation, to meet the growing demand for 5G, along with fiber-to-the-home and enterprise demand, will help drive growth over the next three to five years.

In the US, STL is targeting the $42 billion BEAD project to connect rural America. “We are very well set up with our US factory now to supply effectively made-in-US products for this very large project. So we expect this project to give us opportunities towards the end of this year or early next year.” Agarwal said.

STL managed to reduce its overall net debt by close to Rs 750 crore with the help of its successful fundraising of Rs 1,000 crore through a Qualified Institutional Placement (QIP) route. “The QIP was part of the net debt reduction strategy, but ultimately, the business itself has to generate cash, and then we use that cash to reduce our leverage/debt. That continues to be a priority…​​  our balance sheet is also in a better position,” he said.

Having largely completed our capex cycle, the company has made significant investments over the past three to four years to expand its glass, fiber, cable, and interconnect capacities. “Now is the time to reap the returns, generate cash, and reduce debt in a focused manner. We aim to maintain financial discipline,” he said.

STL is moving ahead with the demerger of our services business, Global Services, having secured approvals from its shareholders and secured and unsecured creditors. It expects the demeger to be completed within three to four months. “We believe this will create shareholder value.”

The top executive also noted that the Red Sea crisis continues to exert some pressure on logistics, causing container costs to rise, although not as significantly as during the COVID pandemic.“...we are actively negotiating with our suppliers and expect things to normalize over the next several quarters.”