Ladies and gentlemen, good day and welcome to the STL Q4 and full year FY 2023 earnings conference call. I'm Pankaj Dhawan, Head Investor Relations at STL. To take us through the Q4 and full year FY 2023 results and to answer your queries, we have Ankit Agarwal, Managing Director, STL, Tushar Shroff, Group CFO, STL, and Raman Venkatraman, CEO, STL Digital. Please note that all participant lines are in the listen only mode as of now. There will be an opportunity for you to ask questions after the presentation concludes. Please note that this call is being recorded. You can also download a copy of the presentation at www.stl.tech. Before we proceed with the call, I would like to add that some elements of today's presentation may be forward-looking in nature and must be viewed in relation to the risks pertaining to the business. The safe harbor clause indicated in the presentation also applies to this conference call. For opening remarks, I now hand over the call to Ankit Agarwal. Thank you, Pankaj. Good day, everyone. Hope you and your family are safe. Thank you for joining us Q4 and full year FY 2023 earnings conference call. If you look at the year gone by, we've made significant progress on all of our outlined strategic priorities. Starting from the Optical business, the revenue grew by 46% on year-on-year basis to INR 5,439 crores in FY 2023. In terms of EBITDA margin, we delivered 20%+ margins from Q2 onwards, which is what we had shared and committed to the market. We have reached 12% market share in global ex-China market, gaining almost 3% market share in one year. This is something we're all very proud of as an Indian company to get this kind of market share in a global technology product. These gains have come particularly on the back of winning multiple long-term contracts from tier one customers in North America. We've become much more entrenched in the U.S. market and have commissioned a greenfield manufacturing facility for Optical Fiber Cable, which will start commercial production in Q 1. We have launched new products such as the Multiverse as well as 180 micron fiber cable. I'm very proud of these developments because the 180 micron in particular will be one of the first companies to make it, and it will be the smallest fiber optic in the world, going from 240 micron all the way now down to 180 micron. All of these steps have propelled us to move forward in our journey to become top three optical networking players globally. In the Global Services business, we have moved our revenue share towards private customers in India. We have also achieved operational break-even in the month of March for U.K. business. We're also very happy to share that we have entered the IT services industry with our STL Digital business unit. We have Raman as well who will share some details with us later. We have seeded the business this year and now have almost 900 consultants on board. We shall give more details in the upcoming slides. Last but not the least, we have exited three subscale or loss-making businesses in line with our stated strategy to focus on few businesses and become world-class in them. We have sold IDS business to Hexatronic Group for approximately GBP 14 million. We have sold our telecom software business to Skyvera, an American company, which is part of TelcoDR for $15 million. We have also exited from the loss-making wireless business in Q4, which was impacting us almost INR 40-50 crores per quarter. In FY 2023, in order to increase transparency, we started segmental financial reporting in three businesses. In three business segments, namely Optical Networking business Unit, Global Services Business Unit, and Digital and Technology Business Unit. We have also met our revised guidance. Our revenue growth for the full year has been 27%. We have reached normalized EBITDA margins by Q4 2023, delivering 15% EBITDA margin for the quarter. Our net debt now stands at INR 3,121 crores at the end of Q4 FY23. As we enter FY24, our strategic direction remains the same. Firstly, we shall continue to grow the Optical business by increasing Optical Fiber Cable market share and the connectivity attach rate that we have been speaking about. We have also started projects to optimize our raw material and fixed costs in the business to become even more competitive. Secondly, we shall continue to consolidate our global services in the segments of our choice. We have reduced our government's exposure in certain places and focus more on the private segment, where we are working with players like Airtel and Jio to continue to provide solutions for them. We're building new capabilities for value-added services. Of course, we're also working on improving our U.K. operations from a profitability perspective. Last but not the least, we shall continue to build Digital India business through focused investments in building new technology and capabilities to grow the business going forward. In the next few slides, let's talk about our first top strategic priority to become top three player in the Optical Fiber and Cable connectivity business. As per the latest industry reports, the Global Telco spend telecom equipment is set to grow by 1% in 2023, despite the overall decline in telco CapEx. Interestingly, in the data center space, overall CapEx continues to grow, although it is by single digit compared to 15% growth in 2022. What we're seeing that in 2023, the growth in the private segment is slightly moderated as compared to 2022. Having said this, on the public investment side, the commitment and execution of various government programs remains strong. Some of the examples that we can share are clearly the U.S., about $97 billion in broadband funding through various programs, including RDOF, BEAD, which is a $42 billion program, the Middle Mile program, et cetera. Similarly, in Europe, places like the U.K., Germany, France, and Austria are investing anywhere between $24 billion-$15 billion respectively around various digital programs. Closer to home in India, we're extremely proud and committed towards the BharatNet project, where there is a program to connect over 3 lakh villages, an investment north of $10 billion. The 5G deployments also continue to remain strong globally. As you see from the chart on the left, by end of 2022, there are already 1 billion 5G subscribers globally, which is expected to triple by the end of FY 2025. As per Ericsson, there are now 235 service providers that have launched commercial 5G services globally, with almost 35 standalone 5G networks. Leading the 5G deployments is China, which plans to increase its 5G base stations from 2.3 million to almost 2.9 or 3 million by the end of this year. As 5G continues to proliferate, we also see that various countries and bodies are already starting to look at 6G, next generation of technology, and what that will mean for the networks. Fiber to the home deployments also remain strong, as you can see on the chart on the right. In the U.S. alone, roughly 8.2 million homes were passed in 2022, which is expected to go up to 12.2 million homes in 2025. This is a very positive development in the market. In Europe, and particularly in the U.K. and Germany, home pass in 2023 is expected to go up compared to 2022. In China, very interestingly, as a next frontier from fiber to the home, telecom operators are now talking about FTTR, which means fiber- to-t he- room. That's really, really interesting when you look at next generation of capability, low latency, high capacity that is actually being used and asked for by users. This will also mean that the speeds that will ultimately go to the homes will actually move from about 1 Gb to almost 10 Gb. You're seeing this not only in China, but parts of Europe, parts of Japan, and also in the U.S., where people are starting to offer 10 Gb services for fiber- to- the- home. The vision for 6G is an era where digital, physical, and human world will seamlessly fuse. Intelligent knowledge systems will be combined with robust computation capabilities to make humans endlessly more efficient and redefine how we live, work, and take care of the planet. 6G technology will increase data transmission rates to more than 100 Gbps and reduce latency to sub-millisecond levels. Its use cases will be in the areas of precision healthcare, smart agriculture, digital twins, and robot navigation. For 6G, mobile operators will need to use higher frequencies and deploy more wireless nodes. All of these nodes will be connected on fiber. In terms of timelines, 6G is planning to introduce 6G applications by early, as early as 2025, but first commercial 6G networks will be available globally, in our view, by 2030. That's something important for everyone to understand, that currently we believe that we have five to six years of network deployment linked to both 5G, fiber- to- the- home, fiber to enterprise, and then within 2028, 2029, we should start seeing network investments continue to accelerate for 6G and other technologies linked to it. Now coming to demand outlook. As for CRU, the medium-term demand of Optical Fiber Cable volumes is expected to go up to 607 million fiber km by 2025, up from 534 million in 2022. In short term, however, demand situation shall be crystallized in the next one to two quarters. What we are seeing, particularly in North America, is that the lead times have come down significantly, and therefore there is a correction in inventory that is also taking place, and carriers are drawing down from the inventory first before they start placing significant orders again. Of course, the labor constraint is also not helping the situation as there is an enhanced need for some of the connectorized solutions have become more pronounced. Europe and Indian markets remain robust. Coming to China, there has been a delay in the China Mobile tender. We expect some temporary softness in demand. We do expect the growth to come back strongly as inventory corrects and the new tender comes out probably in the next few months. Structurally, however, we would like to reiterate that the actual field deployments seem strong, and certainly within a quarter or two, we do expect the demand to start picking up again. As you can see from the chart here, that we are consistently gaining market share in the Optical Fiber cable business. I'm proud to share that in FY 2023, we have reached an estimated 12% [audio distortion], excluding up from 9% in FY 2022. Our Connectivity business has also grown in line with the Cable business. We are following a framework for growth in Optical business. In short term, we would continue to sweat our capacities, particularly across the markets but also in the U.S. In medium term, we would like to grow our Connectivity business and enhance our business in data center segments. Over the long term, we would build new capacities backed by specific customer commitments. I'm very happy to share that as you can see on the left side, celebrations of our China factory. Very happy to share that almost 80% of the team rejoined us when we restarted the factory. That speaks a lot about our culture and our management. This is a factory that continues to operate really well, and we continue to support from this facility our global cable requirements. Also in the U.S., this is the photo of our first cable that was manufactured. We have a strong team that is being built there. We have our equipment now in the facility. The first commercial production and supply will start from this quarter, Q1 onwards. At STL, we continue to invest in R&D to develop and launch industry-leading new products. In FY 2023, we launched Multicore Fibre, which has four times the transmission capacity than normal fiber with the same diameter. Recently, we're also very proud to launch the 180 micron Optical Fibre, our slimmest fiber yet and the slimmest fiber in the world. This fiber enables the smallest diameter in cables with the highest fiber densities. This becomes extremely critical as we both were looking to increase the capacities for 5G, eventually for 6G, as well as for fiber- to- the- home applications. As the service providers densify the networks with more fiber, the duct space will become a precious asset. This is where Sterlite's high density micro cables will enable operators to pack more capacity in a. In a limited duct space, and thereby reducing the cost and also speed of deployment times. We also continue to work as per our framework to grow the Connectivity business as last year we had taken concrete steps to increase our wallet share in key accounts in Europe. A next step, we plan to enter multiple new markets on the back of this year, our strong product pipeline. As we speak, we're going through product approval cycle for multiple products across geographies. We are very mindful that typically these approval cycles can take anywhere between nine months -1 2 months, so we're working very closely with our customers and installers, both from product development stage all the way into testing and approval process. These products commercialize, we expect our attach rate to witness an improvement and a jump. Now let's discuss the progress in Indian market and how we're pivoting in the Global Services Business. The 5G deployments have clearly picked up pace in India, and the 5G subscribers have reached in excess of 50 million. Bharti Airtel has offered 5G service in more than 3,000 cities, while Jio has also launched 5G service in more than 2,300 cities. Both the operators are aggressively driving the deployment and plan to cover the whole of India by 2024. As the deployments take place, we expect operators to dole out between $1.5 billion-$2.5 billion for fiber rollout in the next two to three years. In cable kilometers, we expect the Indian telecom operators to deploy more than 2,000 cable km in next two years. One thing we clearly see is that the operators need to get to the 70% - 80% of their towers to be backhauled by fiber. There's a very strong push for tower fiberization. We see a clear focus from the operators to increase fiber to the home penetration. When you look at the enterprises business, that's certainly an area where they're seeing growth. Again, that will come on the back of very, very strong fiber connectivity. In this 5G deployment, we're partnering with both the leading telecom operators, Airtel and Jio. We are very proud to share that we're one of the preferred partners for Airtel in India in particular. This position has helped us to improve our revenue share from India private customers from 31% in FY 2022 to 43% in FY 2023. We continue to build our capability towards value-added services to improve our margin profile and also reduce our fund involvement. We are very happy to share that we're one of few companies in India and in the world to have received the CMMI Level 5 certification. This is a very important certification and is a testimony to our quality and our processes. That is testament of the high quality team that we have in our Services business. Coming to U.K. Services business, in line with our expectations, I'm very happy to share that our STL U.K. has achieved operational break-even in the month of March 2023. Building on the same, we expect the U.K. business to be profitable in FY 2024. Our sales engine is focused on increasing wallet share from current customers and our delivery engine is focused on being very efficient in scaling out and deploying the fiber networks. Our project execution on services is on track. Among the Indian public projects, our BharatNet projects in the state of Telangana is about 63% complete, including all packages, and the network modernization project for Indian PSU is also 63% complete. Additionally, we have started a new fiber rollout and managed services project. In the Indian private side, fiber rollout for large Indian telecom operator is 100% complete for phase I and phase II. For phase III, it is currently 17% complete. Fiber rollout for another large telecom operator is in the phase two is about 10% complete. Fiber rollout for a large modern optical network for another private customer is 42% complete. Coming to the U.K. fiber, for fiber to the home rollout for all projects combined is currently about 23% complete. Now we shall talk about STL Digital, which is our entry into the exciting IT services industry. At this juncture, I'm delighted to introduce Raman, who's leading STL Digital. Just to give you a brief about Raman, he's an absolute veteran in the IT service industry with more than 30 years of experience. Prior to STL, he was associated with TCS, a Senior VP and Global Head of High Tech and Professional Services vertical, and Global Head of Alliances and Partnerships. As a leader, Raman focus on cultivating trust and empowerment in teams. He lives by his mantra, "Failure is success in progress." In his leisure time he loves to play cricket. I can vouch that he's a very good bowler. Traveling and spending time with nature. Raman, I now hand over to you to discuss how we are building the STL Digital business. Thank you, Ankit. That is a very generous introduction. Thank you. Yes. The IT services industry, as we all know, is in a continuous growth cycle for a very long time. The global IT spending is in trillions, is in multiple trillions, and we expect it to grow at least for the next two to three decades with lots of changes that are happening with cloud adoption and data and everything. The growth is just going to continue. From an STL perspective, there are lots of innate capabilities that we have, whether it is in manufacturing, whether it is in telecom, and also core technology expertise that is there. Our vision is to combine those capabilities of what is there in STL along with focusing on the areas of growth in the IT industry, specifically the new areas of digital, which is cloud, data analytics, cybersecurity in those areas, and then drive through a differentiated experience to our customers and bring more agility into it. That's where we feel we have a great path ahead in building a very strong business in this area. Actually, what we have done is I joined towards end of 2021, and it took about six months or so to build a strong leadership team, a team of strong domain consultants, delivery leads and your industry vertical leads. As we build this team together, we started executing. The response has been tremendous from the market. We reached out to our relationships. We spoke to various customers across markets. In a very short period of time, we built a very strong team of 900 consultants, delivery consultants and a very strong leadership team of more than 50 people. Happy to say that a significant part of that team have been with them as well. We said, rather than focusing on the entire IT area, we'll just focus on a few areas, as I said, with respect to digital, which is focusing on cloud, data analytics, cybersecurity, enterprise SaaS, and core product engineering. We created delivery centers in India and also sales offices in U.S. and in U.K., and started discussing various customers. I'm very happy to say that in a very short timeframe of about eight to nine months, we have been able to acquire 18 global customers, and these are customers in the Fortune 1000, Fortune 2000 kind of areas. They're absolute leaders in each of those different spaces in different industries like technology, life sciences, comms, media, energy resources and all of those. With whom we are engaged as a strategic partner and we are executing long-term engagements that build the order book of more than INR 650 crores. The order book continues to grow in this quarter and revenues have been accelerating, and revenues for last year has been about INR 70 crores of revenue. Pretty much in the last six to seven months, and we expect to continue to accelerate in this year. Overall, it has been a pretty strong journey so far in terms of what we have created as a very strong team. The future looks extremely promising for us as we continue to march forward. From a differentiation perspective, as mentioned, there are lots of innate capabilities within STL from a technology perspective. We have been able to see a very strong domain capability and industry capability as well that we have been able to bring together. These are people with multi, again, just similar to me, who have spent lots of years in the industry, who have built multi-hundred million dollar businesses earlier in their various roles in other companies. What we want to focus is just build a company which is going to focus on specifically on agile. Agile is our mantra, and differentiated customer experience is a key thing that we are going to focus on. As we build capabilities in cloud data, cybersecurity, enterprise SaaS, and as we bring them together and specifically focusing on customer needs for the specific domain, we do see a significant part in terms of how we can deliver a differentiated experience to our customers. This is already reflecting in the kind of wins that we are seeing in the marketplace, where we are able to take head on against the established large players today and able to win key engagements in SAP or in data or in cloud design and all those kind of things. There is a very strong focus in terms of how we are going to build our partnerships because to be able to lead in this world, we need to build a very strong ecosystem of partners predominant in the technology side. We are doing that as well, which is helping us to build the capability and again, thereby delivering the kind of experience that we are looking at. All in all, we have made a fantastic beginning so far, and we hope to accelerate in this journey in FY 2024- 2025 and in our path forward. With this, I would like to hand over to Tushar from our overall financials perspective. Thanks, Raman. Good day, ladies and gentlemen. We shall now discuss our financials in detail. Before discussing the financials, I would like to state that in accordance with Ind AS 105, non-current asset held for sale and disclosure of a discontinued operation for our IDS Wireless business and Telecom Software business are reported as a discontinued operations in the financials. Accordingly, for like-to-like comparison, prior period financials are restated. Q4 FY 2023 revenue grew by 25% on year-on-year basis to INR 1,872 crores. EBITDA grew by 71% on year-on-year basis to INR 280 crores. EBITDA margin increased sequentially and correspondingly to 15%. Net margin increased to INR 82 crores. Revenue growth was driven by a strong growth in Optical business. Margin improvement is mostly on the back of improvement in the margins in Optical business. For the full year FY 2023, the revenue grew by 27% to INR 6,925 crores. EBITDA grew by 29% to INR 931 crores. Net profit increased by 51% to INR 245 crores. For the full year also, revenue growth and margin improvement was driven by the growth and margin improvement in Optical business. Coming to Optical Networking business unit, Q4 FY 2023 revenue has gone up by 40% on year-on-year basis to INR 1,505 crores. EBITDA has gone up by 161% on year-on-year basis to INR 321 crores. For the full year FY 2023, revenue grew by 46% to INR 5,439 crores, EBITDA grew by 93% to INR 1,045 crores. Full year revenue has grown on the back of the improvement in OFC volumes and better realization in some of the market, along with increase in the connectivity revenue. Key drivers to the margin improvements were a product mix shift to higher margin products and reduction in logistic cost. In Global Services, Q4 FY23 revenue stands at INR 352 crores. EBITDA has gone up sequentially to INR 14 crores. EBITDA margin for the quarter stands at 4%. Full year FY23 stands at INR 1,511 crores. EBITDA for the full year FY23 stands at INR 47 crores. As we have said, we are prioritizing cash flow over the growth. Presently we are being selective in order intake. We expect the profitability for FY 2024 to improve as U.K. business has turned profitable in March 2023. Our revenue mix is shifting to customer segment and geographies of our choice. We are increasing our shares in telco segment. In terms of geography, we have increased our revenue share in American market from 13% - 38%. This amazing growth in U.S. market is a reward of our investment in research and development over the years. In terms of new orders this quarter, we continue to partner with leading Indian telcos in long-distance intracity fiber rollout in India. We continue to win multimillion-dollar orders for Optical Fiber Cable in Europe and Americas. In addition to Optical Fiber Cable, we have also won optical connectivity orders in APAC region. Our open order book at the end of Q4 FY 2023 is INR 11,052 crores. Our order book is well diversified across the customer segment and also across our businesses. We also have significant O&M orders, which are already yielding a revenue for this year. We have placed the abridged financials for your perusal. In FY 2024, we expect revenue growth to be around 10%-12%. We shall revisit this estimation periodically as the industry situation crystallizes in upcoming quarters. As we have also communicated earlier, in terms of net debt to EBITDA, we want to reach lower than 2.5 x over the next 12 months. STL's endeavor is to be a responsible leader in ensuring the connected and inclusive world. This focus reflects in the way we have designed and implemented our ESG agenda. We have diverted 3 lakh 25,000 metric tons of waste away from landfills from FY 2019 to FY 2023. We have reduced emission of 23,000 tons of carbon dioxide equivalent through various initiatives in plant from FY 2021 to FY 2023. We have recycled 6 lakh 75,000 metric cube of water from FY 2019 to FY 2023. We are zero waste to landfill and zero liquid discharge certified. We have announced our commitment to become carbon neutral company by 2030. Through our various initiatives in education and women empowerment, over 8 lakh 15,000 lives have been positively impacted from FY 2019 to FY 2023. We have also positively impacted 2.2 million lives through our various initiatives in healthcare from FY 2019 to FY 2023. For our work, we have won 90+ ESG awards from FY 2020 to FY 2023. In response to the corporate action, we have proposed to demerge the Global Services business to STL Networks Limited, a wholly owned subsidiary of STL, on a going concern basis. For the purpose of demerger, company will be filing the scheme of arrangement with NCLT. Pursuant to the demerger, STL Networks Limited will be a separately listed entity with a mirror shareholding of STL. The demerger is intended to meet the requisite conditions under the Income Tax Act to be a tax neutral. This demerger will be very positive for both the Optical and the Global Services business. Both the business can now pursue the growth opportunities independently without any capital constraints. This move shall also help both the businesses to further entrench with clear value proposition to the customers and other stakeholders. It shall also provide the new opportunities of growth for our employees. Last but not the least, the demerger shall help us to widen our investor base for both the entities, thereby unlocking the shareholder value. In summary, I would like to say that our profitable growth journey in Optical business continues. We continue to gain the market share across the focus markets, increase the optical connectivity attach rate, and simultaneously work to optimize our cost base. In the Global S ervices, we continue to focus on India private and move towards the value-added services with improved margin profile and better fund involvement. In Digital business, we shall consciously invest to grow on a quarter-on-quarter basis. We are also working to improve the utilization to move towards the profitability. Last but not least, we have targeted to generate free cash and reduce net debt to less than 2.5x by the end of the financial year. With this, we come to the end of our opening commentary. We shall now move to Q&A. Yeah. Ladies and gentlemen, please note, if you want to ask a question, you can click on the Raise Hand. Also you can send us over chat, and we shall take your question one by one. We'll take the first question from the line of Mr. Pritesh Chheda. Pritesh, you can ask your question now. Yeah. Am I audible? Yes. Yes. Yeah. Considering your outlook, which you mentioned on slide 12, and your backlog, which is flat for the year end, is it fair to assume that you will not grow in the first half and all your 10%-12% net growth which you have given as a guidance will mostly fall in second half of the year? What we've tried to share is what is our credibility. Of course, it's a dynamic situation on two parts. There has been inventory build-up that we have seen from our customers, but also our peers and our competitors in the U.S. have also witnessed. How quickly that inventory get drawn down, how fast can the operator execute on their fiber deployment, that's something that we continue to watch, you know, on a monthly basis. I think our current visibility certainly is that by H2, our financial year, there should be an improvement in pickup. We are watching very closely on our current customers. We're also seeing how we can increase our customer base, across Europe, U.S. as well as India and Australia, to further improve our sales of the cables and the connectivity. I'd say definitely a better visibility of H2 compared to H1. Even in H1, certainly continue to look what more we can do, given some weakness in the North America market. Okay. Any reason why our optical connect rate has not improved this year? Yeah. I thik as we had shared in the past that there are two, three specific areas that we are focused. One is the product development itself. On the back of acquisition of Optotec, we have invested and look to scale up our product portfolio itself. As I shared earlier also, the portfolio requirements are very different, even with again, different for U.S. and the rest of the world. There's a lot of work in on building the product portfolio, creating our own IP to make sure that we can sell them successfully. At the same time, one thing that we have seen has taken longer than expected is the customer approval cycle, both at the supply chain level as well as the install level. These are areas that we have built based on our learning. I'm confident, over the next six to nine months as some of these, both products get developed as well as customer approvals come, that certainly going into H2, there should be an improvement in the sales of our optical interconnect solutions. Okay. On the fundraise, I think you guys have taken a resolution of INR 1,000 crore instead of INR 500 crore earlier. What would be your bend of mind if you have to raise? Will it be a rights issue or you will go and seek funds from investors? At this point in time, the current proposal is the enabling resolutions that we are taking it. It is, you know, you know, it is a part of, you know, the new existing resolution that we have. This is basically a enabling resolution that we have. When we come to the very specific that point in time, we will again inform everyone with respect to our plan in terms of raising of the funds. However, we already have. We are in the process in terms of looking for the right opportunity, right window to raise the funds by way of the right issue, which is already there on the card. Okay. This is my last question, sir. We had a 1,000 crore kind of an EBITDA. We also had some asset sale totaling about, let's say, $50 million-$60 million worth the assets. When I look at the debt, you know, it's not come off a lot. If you could give the cash flow bridge. Where did we deploy our annual cash flows which came in? I would say that INR 400 crores have been deployed in terms of the CapEx and the working capital have been involved. Working capital blockage is about, I would say, including the operating margin as more or less flat. I would say that major part has gone for a CapEx, which is almost like INR 400 crores. CapEx interest and? Yeah. Okay. Yeah. Yeah. We'll see a material reduction next year or we won't? Yes, with improvement in the EBITDA, the kind of, you know, we have, if you look at our guidance and, you know, the profitability in terms of the numbers. Definitely we'll see that kind of a cash generation that we've been targeting. We'll see a definite reduction in terms of our debt. That's why we talked about 10-12 EBITDA to 2.5x. That number, when you are saying 2.6 into the EBITDA doesn't show any debt reduction. That's why I was confused. That statement is a mixed, open-ended statement. Yeah. Lower than 2.6. If I just assign 2.6, then there is no major reduction. That's why I was confused. Yeah. It will be a reduction of about INR 200 crores or INR 200 crores-INR 300 crores kind of things that we've been looking at over next year. One year period. One year, yeah. Which means your CapEx will be higher than your depreciation number. Yes. At this point in time, we have considered a CapEx which is about, INR 350 crorer-INR400 crores. Yeah. Kind of a CapEx that we have considered in our plan. Is this growth or maintenance? It has some part in terms of a growth, in terms of investment that we have in connectivity business. That is Wired business, as well as some part in terms of maintenance CapEx. It's largely in line with what we had already shared. We talked about getting the U.S. facility up to speed, so some link to that, the optical connectivity, scaling that up, and then some maintenance CapEx. I think fair to say at least with current visibility, you know, we had talked about overall cable capacity going from 33 million - 42 million. That all will come in full stream by H1 of current year. Okay. Thank you very much. All the best to you too. Thank you. Thank you for your time. Thank you. Yeah. Thanks, Pritesh. We'll take the next question from the line of Mr. Balas ubramanian. You can ask your question now. Good evening, sir. Thank you so much for taking my question. My first question, like, what is the current scenario for OF and OFC realization side? DGTR recommends anti-dumping duty on Optical Fiber for imported from China, Korea and Indonesia and other countries. What would be the impact after this anti-realization side? These are my first question. I'll take the second one first. So far, just to be clear, there is a recommendation by DGTR, DGFT to for the anti-dumping versus some countries like China, Indonesia, et cetera. This is still to go to Ministry of Finance for their approval. It is not, this is something that is still work in progress. Of course, we are very confident of the merits and we do believe that there is a clear case of dumping. We also believe that Indian capacity is far more than sufficient to meet the country's requirements amongst all of us in terms of the leading players. I think it's still in the next, say, few months we'll see the results of Ministry of Finance. of percentage that could be charged in terms of duty will also vary, I think anywhere in the range of 5%-15%, depending on the country and within that the respective player. I think let's wait and watch in terms of how the actions progress. But we are hopeful that this will be positive outcome for the Indian industry, both I think from bringing the supporting the Indian industry, but also I think from a quality perspective, ensuring right kind of fiber and quality of fiber is coming into the country. I think in terms of the overall market, as we said that there has been some delay in the China Mobile tender. To that extent we've seen some softness in the fiber pricing in China. I think as we shared that we don't really see that immediately impacting the cable prices, at least in our focus markets of Europe and U.S., because a lot of these markets are quite protected against, say, Chinese cable in particular. Yes, we do see some softness in fiber prices locally. The current imports of fiber into India or into markets like Indonesia and other places, we do see some reduction in prices. We are positive that China Mobile, given its focus on 5G and fiber to the home, we are hopeful that in the next few months there should be a good volume tender and pricing tender for the China market and prices should also normalize after that. That's our current visibility. It is, we are watching it closely, but we are also confident given that we have long-term contracts with tier one customers that we will continue to have a positive growth. As we have shared, there is also inventory in the U.S. that we see and also our peers see. As the operators continue their deployment and scale up their deployment, as the inventory gets reduced, then we shall continue to see fresh demand growth from North America in particular. Okay. Got it, sir. Sir, my second question is, could you please share the volume growth for OF and OFCs, for the quarter and full year? Also could you please share on the optical interconnect attach rate? Yeah. Value terms. No, so I, just to be transparent, we are not sharing actual capacity and volumes for last couple of quarters for competitive reasons. We can share that the volumes have increased in Q4 versus Q3. Certainly going forward, we have positive... As I shared, the shift from 33 million - 42 million will be completed by H1, so I think that's a good capacity that'll be coming on stream. On the fiber side, we continue to look at options to scale up our fiber, both in India as well as our fiber draw operations in China. I think that's also something that will be positive. I think we will have good amount of capacity available, and as we continue to secure our contracts in our focus markets, we should start seeing volume increase, particularly in second half of this year. Thank you, sir. My last question is could you please share the capacity utilization on across plants in India, China and U.S.? This is my last question. Sorry, I won't be able to share that. As I just shared, we are not sharing our capacities and utilizations at a unit level. Suffice to say that we had good utilization in Q4. We are watching the market closely in quarter one and quarter two. Certainly confident of our capacities coming on stream and we are working hard to fulfill those capacities. Thank you, sir. That's it from my side. Thanks, Bala. We'll take the next question from the line of Mr. Hiten Boricha. Hiten, you can ask your question now. Hello. Yes, we can hear you. Please go ahead. Yeah. Yeah. Okay, yeah. My first question is on the inventory build-up which happened in U.S. Can you shed some light what exactly happened and why we saw inventory build on, I mean, U.S.? I think overall, what we had seen in the last 12 to say 12 - 16 months, is that the lead times had increased quite significantly, going up to almost 40- 50 weeks in the U.S. for certain cables and connectivity. At the same time, various telecom operators, service providers in the U.S. had some very strong and ambitious plans to deploy the fiber, which still continues, by the way. In this period, because of the large lead times and their clear visibility of deployment, they had started building a lot of inventory. What we now see is that they are probably not being able to execute on the ground, mainly because of labor shortages. Trained labor shortages and some permitting issues. Because of this imbalance, they have a certain amount of inventory built up, and other side they are not able to deploy. As in also what we have seen is now the lead times have come down from, what, 40- 50 weeks to probably anywhere between six-10 weeks. The operators are also now aware that as and when they need it, they can pay, get the cables quickly. That's where we are in this in-between phase. The intent to deploy continues across the operators. Most of them are listed, and they announce their CapEx plans. We are tracking that very closely. In our own conversations with them, they continue to remain committed, but they are sharing this visibility of the inventory. Our current visibility is that it will improve in H2, but of course, we are working on how to further improve our sales in H1 as well. Okay. This is the main reason for a price structure. Just want to understand how has the pricing volatility for the cable because of this inventory build-up? Sure. Yeah. There's two levels. One is in certain markets, like in China, Southeast Asia, you know, pockets of Africa, where we do see some of the Chinese players. There we have seen some reduction in pricing because of, say, demand reduction in China, which we believe is a temporary phenomena, probably for next few months. That is on one level. I think we have seen limited competition or almost zero competition of Chinese in Europe and North America. Pricing is still stable. It might have come down a little bit given these inventory levels. Our bigger focus is to continue our commitments with our long-term customers. The way the contracts are set up generally is that there is a good understanding both of volume and pricing. Given the long-term nature of these contracts, we continue to negotiate with them in ensuring that the volumes also continue. The other element, Hiten, is very important, is that our factory in U.S. is also coming up. There's a good amount of effort we're putting in to ensure that we get good long-term contracts to support those facilities to be fully utilized. Sir, can you quantify the pricing? What was it in FY 2022 and in FY 2023? I think it'll really vary by market. Mm-hmm. I think, for example, we would have seen probably a 10%-15% reduction in China on the fiber prices. It would be smaller in other markets. Again, I wouldn't generalize, but each operator, and depending on which market they are, who the competition is, I think that varies. You know, anywhere between 5%-10% is possible in other markets as well. That's again, just a general data point. Each customer and depends on our contract and our negotiations, that would vary. Okay. Only one last question, and then I'll again get back in the queue. Just question is on the dividend. We are giving the dividend of INR 1, and the other side we are also looking to raise a fund. Yeah, I know the dividend outflow is very low when we compare to the fundraise, but just wanted to understand the rationale behind that, why we are giving dividend and on the other side we are looking for fundraise as well? Thank you. Yeah. Hiten, as I said, that dividend is, you know, important because it's a source of earning for a lot of investors for us. Keeping that in mind, and as per the policy, we are supposed to declare the dividend. That's the reason that we have declared the dividend. Yes, we will be raising the right issue, but the right issue will be continued on the right timing and the right market conditions. We'll be watchful of that to get into the market with respect to the right issue. Okay. Okay. I'll get back into queue, sir. Thank you. Thank you. Thank you, Hitendra. Thanks, Hiten. We'll take the next question from the line of Mr. Pratik Singhania. Pratik, you can ask your question now. Yeah. Hi, Ankit. Hi, Tushar. Hi. Ankit, in terms of the deployment rate, how do you track it? Like, what metrics do you observe, whether it is monthly, quarterly, fortnightly, to determine whether the ground level demand of fiber optics in U.S. is not slowing down? Sure. Yeah, good question, Pratik. It's also my brother's name so I'll give you a good answer. I think three, four metrics. As I said, a lot of these customers of ours are public, both in Europe, U.S., Australia. They regularly publish both their CapEx spend, their forecast for CapEx, at least for next months. On a quarterly basis, they share both in terms of subscribers as well as homes passed. It's clear, they give a target of home pass generally, at least for one year forward, and some of them even have three-five year targets. That's something that is from their own data that gets published. On top of that, we see very interesting data points in deployment companies. We can give you some examples. There are companies in U.S. called Dycom and MasTec, which are listed. They share their data points of how they are deploying the fiber on behalf of these customers. Again, you can see the latest Dycom results. They've just signed multi-year contracts with many of our customers where we supply cable and they would do the deployment. These are kind of two or three data points. Of course, we have CRU data, which we also share with you from time to time, which is probably a third data point. Of course, the most important being our own conversations with the customers, how they are seeing the visibility. Of course, on very regular basis, that conversation happens at senior levels. I think multiple data points, and, you know, and hence the outlook we are giving you is a summation of these data points. For the calendar year 2023, H1, we are witnessing slowdown in deployment rate, as well as the inventory level, coming down at the customer level or how it is? Yeah. Do you have any growth rate, in terms of deployment, whether it is down sequentially or up, in terms of percentage? I'm happy to share probably some data points with you offline purely based on what some of our customers have shared. I think what definitely we can tell you is that there is the biggest constraint in North America, in Europe, various parts of the world, is even if operators want to scale up, say 10%, 20% year-on-year, they are getting constrained by availability of manpower. This is a global concern where operators are now investing directly in building in the training capability of people. This is something that is now becoming the major constraint to rapidly scale up the deployment. We don't see a constraint in capital. We don't see a constraint in intent. In fact, most of them have talked about how they want to grow their deployment, but they're clearly seeing a challenge in execution on the ground. In some pockets of U.S., some pockets of Europe, there's also constraints in terms of permission and permitting, which also again, is an ongoing effort to ease those out, like we see in India as well. Okay, got it. In the Digital business, you talked about having an order book of almost INR 650 crores. This amount would be executable over how many years? In next, say, two - three years' time, how scale this business can reach? Yeah, Raman, over to you. The orders are both near-term and long-term. We have some orders that stretch to three-four years duration, and then there are many orders that has to be executed over the next 18- 24 months. From that perspective, and most of the orders that we have got is in the third and the fourth quarter. We see the future pretty good in terms of how we are going to execute those orders, and we continue to gain new orders in this quarter as well. It's pretty good, the way we see it. In next three years, what kind of a scales you aspire to reach in this business in terms of top line? This particular year, yeah, this particular year, if you look at our guidance that we have given, we will at least grow the business by at least three - four times. That's what we're expecting for this year. Mm-hmm. I would say for FY 2025 or FY 2026, again, the futuristic, too much it is too much in the future. Still, looking at the way that we are scaling from a quarter-to-quarter perspective, it looks pretty good. It will have decent growth in FY 2025 over FY 2024 Yeah. I also... I already mentioned. Yeah. Yeah. Sorry, Pratik. Sorry. I think a bit early to give a longer term forecast. Mm-hmm. I think from an STL perspective, definitely one focus, as for everything in STL, is first focus on profitability. We have put in about INR 120 crores last year into this business, as an investment. Mm-hmm. Also probably similar level will go into this year. The real priority now for Raman, while tremendous work on the order booking and the right team, now to break even and start becoming profitable, you know, towards the end of this year is what he has committed. I think that is more where we are really focused. I think clearly, a lot of success with very high quality clients. We are watching this on quarterly basis, and certainly there's good potential to grow it. Okay. In terms of the demerger, the right issue or the fundraise that you plan to do, would it be like any, like segregation is there wherein how much you will put in the services, plus Digital business versus how much you'll be using for the product business? No. At this point in time, this entire demerger is going to take anything between, I would say, nine-12 months, depending on the NCLT approval process. Whatever the proceeds that we may get will be used for the both the business in order to bring down the overall debt. Whatever we discussed in terms of debt to EBITDA 2.5 x is not considering, you know, any kind of right issue proceeds that we may have. Got it. In terms of optical interconnect, I assume that a lot of our products are under the trial phase, testing phase with the clients. Yes. Any like visible breakthrough that you anticipate in FY 2024 for your optical interconnect business to grow maybe 2x or something like that because it's a very, very good business per se. Anything with respect to Australia and U.S. market where you anticipate a good growth in optical interconnect can come from this geography? I mean, look, I think good question. As I said, it's a balance of all three. There's still work to be done to build product portfolio, both for telecom operators and I think also eventually for data centers. I think that those are areas we clearly need to build that out. We continue to build our internal teams also who have specialist knowledge technically and sales wise in this field. That's another work in progress. The third part is on the IP part. As I said earlier also, this is a, this is a field with a lot of IP, and we wanna make sure that we build the right product with the right IP as we're entering these, you know, global geographies. Then obviously the part that is probably taking longer than we expected is the customer approval cycle. I think that's probably something where there's been learnings for us and we'll really look to fast-track that as much as possible going forward. That's both at the customer level and at the installer level. I think these are some of the, let's say learnings. I continue to be positive. There's no question. I think as you said, it's a good business to be in. It's complementary to our cables. The customers are looking for solutions of cable and connectivity together. Really, even if you look at, for example, our latest product, the 180 micron, essentially with a thinner fiber you can get a thinner cable. Those thinner cables can be more compact and lead to a more compact interconnect solution, right? It's all interconnected for us. The more of these solutions we can provide to our customers create value for them and for us. Right. That leads to my other another question that can we expect at least a fiber division of STL to be running at 90% capacity utilization for the current year? Because, see, you have such a good product in terms of your capability and everything is all top-notch. At least, whatever we need internally, we can consume in the balance. Is it possible to increase that like external sales of fiber in this current year? Say what? I think it's, look, we're, as I said, we, you know, strategically we've always said we want to focus our fiber towards our cable, and cable and interconnect will be our go-to market. That continues to be our strategic focus going forward. There, as I said, we want to be tied up with tier one customers globally to make sure that they buy our cables and interconnect solutions. That remains our priority. I think then it really is a function of how quickly can we scale up our, as these capacities are coming on stream that I spoke of in the U.S. and other places, how quickly can we utilize those capacities, and then obviously then pull in the fiber for making that happen. Very positive about our capacities coming on stream by end of H1. I think we have to watch the market very closely politically in U.S. to make sure that we can pull through those volumes and then on the back of that, the Fibre. Right. At we have 50 million FKM fiber capacity. Yes. It will be a 42 million FKM cabling capacity. Yep. The balance, at least nine, the balance whatever is 8 million, at least 90% of that can be, can't we do like the external sales, till the time we set up another cabling capacity maybe in U.S. or domestic? No. I think that those options will continue to remain. We will be doing some amount of fiber sales very strategically to some long-term customers and also value-added fiber, so next generation fiber, et cetera. Those are things that will continue. Also to be mindful between cable and fiber, there's typically a 5% scrap. It won't be that the delta is exactly what we will sell externally. Some portion of that we would be utilized. We would use larger portion than 42 in our own internal captive requirement. Okay. My last question would be respect to the services receivable. Can you update anything with respect to that? What's the current status? Sorry? Receivable for services. I think, receivable for the services, you know, with respect to some of the projects, as we continue to execute some of the projects, it starts to liquidate, the outstanding that we have on, the other business. Okay. What kind of operating cash flow can we expect from Services business this year, given the release in working capital from them? We are targeting something like, INR 100 crores-INR 200 crores to be released from the Service business this year. Okay. Great. Great. Thank you so much for answering my questions and all the best. Thank you. Bye. Thanks, Pratik. We'll take the next question from the line of Sir Sunny [audio distortion]. Sunny, you can ask your question now. Thanks for taking my question, and congratulations on an improved set of numbers and also some debt reduction after quite a few quarters. Thank you. My first question is, in terms of the growth rate that you've highlighted at 10%-12%, can you basically help us understand what would be the growth in the Service business in that and what could be the mix of growth from the Optical business? Because that growth rate seems to be very conservative, considering your Digital business will grow significantly. Although the base is very small. Yeah. There is very high growth there. Are you assuming a flattish or a degrowth in theS ervice business? Yeah. Look, I think maybe I'll break it up. Certainly Optical, we have capacities coming on stream on one side. Other side, there are some, I would say, near term, you know, areas we need to look at in North America in particular. We also need to be mindful and watch closely on the pricing and lead time. I think those are a combination of things we're watching out for, particularly in H 1, but certainly quite positive or more positive in H2 on the Optical. At the same time, as we also shared briefly, there's a lot of focus now internally to improve our cost structures and reduce our working capital, which should support the business as well. That's broadly what we're trying to do on the Optical part. Of course, then continue to look at options to grow our Interconnect business as well. That's on the Optical. On the Services part, I think three, four large opportunities for us. We are looking at scaling up our deployment with operators like Airtel and Jio, so some interesting opportunities there. There are some couple of opportunities we've started to get into on the managed services, and so looking to scale up on there. Then, of course, there could be a big bang at some point in the current year if BharatNet materializes in some form. Certainly that's an area, again, with the right payment terms, right milestones, and cash visibility, we would look to participate and be a leading provider both on cable connectivity and the services for that business. Then I think as Raman alluded to, we started with a base about INR 70 crore. We think it's a good base to now scale up from there. Again, it's a small number compared to the overall STL number for the current year. Currently, we're at about INR 6,800 crore-INR 6,900 crore. So even if you take 10% growth of that's another, say, INR 700 crore-INR 800 crore growth on that. I think that's where, you know, I would say that balance is there. Some growth will happen on Optical, clearly. Services, we do see the opportunities, but we are very, very mindful of cash being a priority in the Services business versus top line growth. Hence, probably we are conservative there on the scaling up of services. As I said, IT services are small base today. Sure. Just to confirm, reconfirm on this. In your guidance of 10%-12%, you are not assuming any big, or basically largely flattish numbers in the Service business, right? Sure. Yes. Okay. Got it. In terms of the Sunny, coming back to your specific point. The purpose of creating two separate entities that, you know, that the capital should not become a constraint for the growth of these two businesses. That is the fundamental way that we have been looking at, so that both the business can grow independently without having any constraint on the capital. That's our fundamental, that's the reason that we are creating this company. That's one of the clear reasons that we are looking at, so that both the companies can grow independently. Sure. Got it. Got it. My second question is on the demand outlook, that you highlighted. Basically, you've been highlighting that there is some kind of demand softness in North America. Considering the situation, do you foresee any volume declines on a QOQ basis? Or what you're trying to communicate is, on whatever base we have in Q4, there may not be a significant growth at least for next one or two quarters, and then we can see growth in the second half? Or do you see some declines for the next one or two quarters? We're still. I won't be able to comment in quarter two because as I said, the, you know, it is, quarter two for us would be end of, you know, H1 and calendar year for the U.S. We're watching the data still closely. I would say that quarter one, there is possibility of a quarter-on-quarter volume decline. Also have to be mindful that, both Europe and U.S. are typically our better margin regions. I think those are elements that we are watching closely in terms of not just volume impact but also our profitability impact. As I said, there's. We've got these inputs from the customers. We are actively looking at how do we look at alternate customers, what more can we do, can we get more wallet share from our current customers? Of course, we're also looking at other markets outside of North America and Europe, including in India and other markets where we can further scale up our cable sales. Got it. Got it. Fair enough. My third question is on the margin profile. You've done a very good job of scaling the optical margins- Yeah. to about 21%, more than 21% in Q4. Basically, on the cost, you've given a good direction on the pricing and- Yeah. demand. On the cost side, are all the cost savings in the base or are there further potential cost savings possible from, say, either helium cost or any other raw material or logistics cost? How should we look at the margins for FY 2024 as a whole? I understand Q1, Q2 may be slightly challenging. Yeah. How should we look at FY 2024 as a whole? Yeah. I think still, as I said, a little bit early to say. I can tell you what we are focusing on. I do believe, there are opportunities for cost reduction purely from the operations. Of course, as we had called out, helium has been one big X factor for us. That we still continue to see challenges and shortages in the market, from a pricing and availability perspective. Our own current view is that probably another five-six months at least, that will continue to be a concern. On the positive side, obviously we have talked about, you know, trying to push forward on the connectivity side where we have seen higher margins. I think that is something that certainly into H2 we do believe that should improve, and there's a focus there. I think it's a balance of these two, three things. Some, some possible volume decline, some challenges in margins because of U.S. sales, some cost areas where we are focusing to improve, but helium continues to be a concern, and then possible upside from the interconnect. I think it's a balance of all of these things. I would say currently we are focused that at least we should get to 20% margins, but again, it can vary a little bit, at least in H1. Okay. Got it. Got it. My last question is on the Service, the margin profile in the service and the Digital business. There was some margin improvement that we saw in the Service business in Q4. Now with UK business, say, breaking even in March 2023, how should we look at the margin profile in the Service business, going forward, say for the coming immediate quarter and the full year, FY 2024? Sunny, we have been looking at the margin profile, EBITDA margin profile to improve presently from 4% to on a consolidated service level to the 8% kind of a level that we've been looking at. Uh- So gradually moving on quarter-on-quarter basis with improvement in terms of the overall operations in U.K., you know, we see that, you know, there will be a gradual growth in terms of an EBITDA. Will it be fair to assume that 4% is the base now and you should see gradual improvements every quarter going forward? Ideally, yes. Okay. My last question on the Digital business. The EBITDA burn was about INR 35 crores in this quarter. One part mindful of that, especially monsoon is typically lower deployment, right, in India. I think that's something we'll have to watch for in this kind of June, July, August monsoon period, where actual deployment would be a challenge for our projects across India. Sure. Got it. Got it. On the Digital business, your burn in Q4 was about INR 35 crores. Is this the peak quarterly burn that we should see? There could be for the next one or two quarters, higher EBITDA loss and then basically break even towards the end of the year. How should we look at that? Yeah. We believe this is the peak. It should start coming down as, you know, our utilization of our teams and the projects that we have, start to improve. Then as we said, get to break even by, say, between quarter three, quarter four period, time period. Right. That you, in one of the statements you highlighted that your investment in this business, for FY 2024 also could be INR 125 crores. Yes. Uh, but then- Yeah, fair enough. things won't add up, right? Correct. Correct. Between, I would say currently visibility is around INR 120 crores. Obviously, say for example, if entire quarter four breaks even, to that extent INR 20 crores-INR 30 crores could be lower. Okay. Got it. We are in that range of I mean, I would say safely take about INR 100 crores, for example. Got it. Got it. Thanks. Thanks for the detailed answer. Yep. Thanks, Sunny. Ladies and gentlemen, with this, we come to the end of Q&A session. I now hand it over back to Ankit Agarwal for closing remarks. Before I do my closing remarks, I just wanted to highlight that I was recently in a forum in Brussels with our ministers and representing on a panel with Indian CEOs. I must say there was a lot of excitement and positivity for increasing partnership between Europe and India. Really I think that represents a lot of opportunities even for STL across our businesses on Optical and Services and of course on IT services as well. I think there's a very strong interest. I think it was a privilege and very grateful to be part of that forum with the ministers and I am very bullish that the business between India and Europe will grow significantly from here given the kind of conversations happening. Overall, again, thank you everyone for attending this call, showing interest in our company, for all your inputs, over several quarters. We hope we are able to address and clarify all your queries. We hope we've given you good visibility of how we see the market in the coming quarters. For any further questions and discussions, feel free to contact me directly, which includes myself and Tushar. We really look forward to continuing this conversation with you in the future. We welcome you to visit our facilities, which I think you'll find very interesting. Do keep in touch. Thank you. Stay safe. Thank you all. Thank you. Thank you. Thank you. Thank you, Raman. Jay, you can stop the recording, please.