Sterlite Technologies Limited (STL): Company Stock Analysis

Posted on June 27, 2025June 27, 2025 | by rajeshkumar

Sterlite Technologies Limited’s recent demerger of its Global Service Business

The change you’re seeing in your demat account from STLTECH shares to INE1VXE01018 is due to Sterlite Technologies Limited’s recent demerger of its Global Service Business. This is a legitimate corporate action that was successfully completed in June 2025.

What is INE1VXE01018?

INE1VXE01018 is the ISIN (International Securities Identification Number) for STL Networks Limited, which is the newly formed entity after the demerger. Your original 2800 STLTECH shares have been converted to 2800 shares of STL Networks Limited in the same ratio.

The Demerger Details

Corporate Restructuring
Sterlite Technologies Limited successfully completed the demerger of its Global Service Business, creating a separate listed entity called STL Networks Limited. This demerger was part of the company’s strategic restructuring to separate its different business verticals.

Impact on Major Contracts
The significant ₹2,631 crore BharatNet contract that STL secured with BSNL for the middle-mile network in Jammu & Kashmir and Ladakh (Package 13) will be novated to STL Networks Limited following the demerger. This ensures business continuity for the separated entity.

Why Your Share Price Appears Reduced

Normal Demerger Process
The apparent reduction in STLTECH share price is typical during demerger situations. When a company demerges, the original share price gets adjusted to reflect the value of the remaining business, while shareholders receive equivalent shares in the new entity (STL Networks Limited) to compensate for the separated business value.

Combined Value Preservation
Your total investment value should theoretically remain the same when you combine the adjusted STLTECH shares plus the new STL Networks Limited shares you received. The market will eventually price both entities based on their individual business fundamentals.

Recent Company Performance and Context

Business Developments
STL has been actively expanding its portfolio, particularly in AI-driven data centre solutions, which was announced on June 16, 2025. The company has also been securing significant contracts, including the major BSNL deal worth ₹2,631 crore.

Stock Performance
Prior to the demerger, STLTECH had shown positive momentum with an 11.6% gain over five trading sessions in June 2025, reaching ₹107.72 at one point. However, the stock has faced volatility throughout 2025, with the company reporting losses for consecutive quarters.

Verification and Next Steps

Official Confirmation
This demerger is verified through multiple official announcements and regulatory filings. The company has made proper disclosures under SEBI regulations, and the demerger has been completed as per regulatory requirements.

What You Should Do
Monitor both your STLTECH holdings and the new STL Networks Limited (INE1VXE01018) shares in your demat account. Both entities will trade separately on the stock exchanges, and you can make independent investment decisions for each. The discrepancy alert in your demat account should resolve once the corporate action is fully processed and updated in your broker’s system.

This is a legitimate corporate restructuring, and your shareholding has been appropriately adjusted to reflect the new corporate structure while preserving your proportional ownership in both the continuing and demerged businesses.

28 June 2024

Observations and SWOT Analysis of Sterlite Technologies Limited (STL)

Observations

Financial Performance:
- Revenue Growth: Highest-ever revenues of ₹6,925 crore ($863 million) in FY23, a robust 27% growth over FY22.
- Profitability: Strong EBITDA growth, particularly in the Optical business, which saw a 46% revenue increase and 93% EBITDA growth.
Global Expansion:
- Geographical Presence: Operations in India, USA, UK, Italy, China, and Brazil, with 11 world-class manufacturing facilities.
- Strategic Initiatives: Expansion into new markets and substantial orders in the US, UK, Europe, and the Middle East.
Innovation and Product Development:
- Technological Advances: Introduction of industry-first products like Multiverse, which unlocks 4X capacity, and development of the 180-micron optical fiber.
- Sustainability Focus: Zero Liquid Discharge in six out of eleven global manufacturing facilities and strong emphasis on sustainability in product design.
Client Engagements:
- Major Contracts: Multi-year, multi-million dollar orders in the US and significant projects in Europe and the Middle East.
- Indian Market: Active involvement in India’s 5G rollout with orders worth ~₹500 crore post-5G spectrum auctions.
Social Responsibility:
- Community Impact: Initiatives like water conservation in Maharashtra and women empowerment programs.
- Sustainability Goals: Committed to Net Zero Emissions by 2030 and various environmental conservation efforts.

SWOT Analysis

Strengths:

Strong Financial Performance: Consistent revenue and EBITDA growth demonstrate financial stability and effective business strategies.
Global Reach: Extensive global presence with manufacturing facilities and operational footprints in major markets.
Innovative Product Portfolio: Continuous innovation in optical networking and digital solutions positions STL as a leader in the telecom industry.
Sustainability Commitment: Strong focus on environmental sustainability and social responsibility enhances corporate reputation.

Weaknesses:

Dependence on Key Markets: Heavy reliance on specific geographic markets could pose risks if market conditions change.
Operational Complexity: Managing operations across multiple countries with diverse regulatory environments can be challenging.

Opportunities:

5G and Beyond: The global rollout of 5G networks presents significant growth opportunities for STL’s products and services.
Emerging Markets: Expanding into underpenetrated markets, particularly in rural and semi-rural areas, can drive further growth.
Technological Advancements: Continued investment in R&D can lead to the development of next-generation telecom solutions and services.

Threats:

Intense Competition: The telecom industry is highly competitive, with constant pressure from global and local players.
Regulatory Changes: Changes in government policies or regulations in key markets can impact business operations and profitability.
Supply Chain Disruptions: Potential disruptions in the supply chain, particularly for raw materials and components, can affect production and delivery timelines.

Conclusion

Sterlite Technologies Limited is well-positioned for continued growth and success, leveraging its strengths in innovation, global reach, and sustainability commitment. However, it must navigate challenges related to market dependence, operational complexity, and regulatory risks to maintain its competitive edge in the dynamic telecom industry.

20 June 2024

Summary of Sterlite Technologies Limited (STL) – CRISIL Rating Report (June 2024)

Rating Status:

Long-Term Rating: CRISIL AA/Watch Negative
Short-Term Rating: CRISIL A1+/Watch Developing

Key Points:

Weaker Operating Performance: Revenue and EBITDA decline in FY24 due to weak demand in North America.
Debt Management: Raised ₹1,000 crore in equity in April 2024 to deleverage.
Demerger: Planned demerger of the global services business into STL Networks Ltd.
Order Book: Strong order book of ₹10,290 crore, with expectations of improved performance from new orders under BharatNet Phase 3 and the US BEAD program.