Thread by @ashishkhokha

Sterlite technologies - a play on the data and digitisation theme. Expensive valuations but worth studying and accumulating below 290. Only company in the world to have silicon to software capability, critical for tomorrow's data networks.
#SterliteTechnologies

In FY18, Sales grew 30% and earnings grew 66%. Margins are expanding nicely as well. 54% of total revenues came from international markets. 8 of the top 10 global telecom operators use sterlite's product TS and solutions.

A digital revolution beckons us. Global IP traffic crossed 1 zetta byte in 2016. It is expected to keep growing 26% for next 5 years and cross 3 zetta bytes in 2021.
1 zetta byte = 10 raise to power 22 bytes.

3G technology required 2x the fiber outlay vs 2G.
4G required 3x the fiber outlay vs 3G.
5G will require in similar or higher multiple.
Global fiber consumption is correlated to global data traffic.

Sterlite fiber capacity will go from 30MM km in Mar 18 to 40MM km in Dec 18 to 50 MM km in Jun 19.

Utilization was 70% in FY18. That is approx 21MM km. It is expected to be 85-100% in FY19. That could mean 33-38MM km in FY19.

That is a 50-90% growth next year vs FY18.

Order book is healthy and growing. It is up 73% in Q4 18 vs Q4 17. Approx 5223 cr. Long term customer engagement drives predictability. Diversification reduces business risk. Fiber capacities are booked for more than a year.

Company is targeting $100MM in net income by FY20. I believe it is well poised to reach there. Earnings can grow CAGR 30-35% for next 3 years. Debt is coming down. Working capital cycle is getting better. Cash flow generation is getting better.

Most gains are off the table as stock has appreciated. Its a good buy on dips.
Disc - invested.
#SterliteTechnologies