- 27 Oct 2023
- ICICI Securities
US SLOWDOWN IMPACTS REVENUES; GROWTH RECOVERY PUSHED TO FY25
STLTECH - 70 Change: 3.58 (5.39 %)News: Revenues came in at ₹ 1494 crore, down 11.4% YoY. The product segment declined by 17% YoY to ₹ 1084 crore on account of weakness in US markets, while services declined by ~9% YoY% QoQ to ₹ 375 crore. Reported EBITDA came in at ₹ 213 crore, down 8% YoY, with EBITDA margins at 14.3% (up 53 bps YoY and 20 bps, driven by improvement from services segment margins. PAT was at ₹ 34 crore.
Views: The company has lowered the revenue outlook and now expects decline in revenues vs. 7-9% growth guided earlier in FY24, given the likely weakness in US. However, it has maintained margins expansion and debt reduction plans. It expects recovery from FY25, albeit near term to witness muted demand as US telcos spending will be muted amid higher inventory with them and macroeconomic uncertainty.
Impact: Negative