Sterlite Technologies Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS

NEW FRONTIERS IN DIGITAL TRANSFORMATION

It was 2020 and all of us were amazed by the possibilities of widespread digitalisation. Three years hence, the promise of Digital has been established beyond doubt. Rapid digital advances continue to sweep the world, with their effects being felt across our day-to-day lives and a wide array of industries including telecom, manufacturing, transportation, biosciences and e-commerce. With each passing year, new-age technologies like Artificial Intelligence and Machine Learning (AI/ML), Internet of Things (IoT), Virtual Reality (VR), Augmented Reality (AR) and Cloud computing, are maturing and unraveling the path ahead.

Today, we can vividly imagine the full extent of the possibilities that digital transformation presents to us. Here are some interesting technological developments that are making rapid advances and exerting considerable influence on our lives

Artificial Intelligence and Machine Learning, in action

The launch of ChatGPT marked a significant milestone in the mainstreaming of AI/ML technology and paved the way for large-scale consumer adoption. We stand witness to the versatility of this conversational chatbot as it nonchalantly responds to any query put forth before it. This development has far-reaching implications in the way we carry out our everyday lives. The roaring reception received by ChatGPT would provide the impetus needed to fast-track research in this space. We can expect more such applications catering to a wide variety of use cases in the coming years.

Extended reality, getting closer to adoption

Extended reality, which encompasses Augmented Reality (AR), Virtual Reality (VR) and mixed reality is another interesting phenomenon that is taking the world by storm. The digital ecosystem is tirelessly working to create a virtual world that mirrors the physical world. From immersive entertainment to applications that enhance productivity and foster greater collaboration, the user experience is being redefined. The launch of an immersive viewing experience in the Indian Premier League by Jio, shows how close we are to taking AR/VR to the masses. As the steam picks up, the next frontier of growth for this technology would be the multisensory Extended Reality, which could ultimately culminate into the much-famed Metaverse. According to estimates from Statistas Advertising & Media Outlook, we are still in the nascent stages of AR/VR adoption. By 2027, both AR and VR are expected to surpass 100 million users worldwide.

IoT gathering pace

Over the years, the adoption of IoT-based solutions has picked up in home automation, supply chain management, smart cities, Industry 4.0, consumer electronics like smart wearables and more. With the introduction of standalone 5G in many geographies, networks are now more agile than ever, to handle IoT and M2M communications. According to the Ericsson Mobility Report (November 2022), cellular IoT connections are set to grow from less than 3 billion connections in 2022 to more than 5 billion connections in 2028.

Further, 60% of the connections in 2028 are expected to be based on 4G/5G technologies followed by massive IoT technologies like NB-IoT and CAT-M

Open platforms, edging towards democratisation

Another promising technological trend is the launch of open platforms that seek to democratise financial and e-commerce transactions. In the Indian context, Unified Payments Interface / Open Network for Digital Commerce (ONDC) are classic examples. According to the economic survey, between CY19 & CY22, UPI transactions grew by approximately 115% in terms of volume and 121% in terms of value. In December 2022, UPI touched 782 crore transactions worth _12.8 lakh crore. This is expected to grow further. After the roaring success of UPI, the Indian Government is working towards a similar disruption in the e-commerce space through ONDC. This is expected to create a more inclusive e-commerce platform that encourages wider participation from buyers and sellers alike.

Cloudification and Edge Computing, growing at breakneck speed

With the explosion of new use cases, there is a growing need to have network and computing infrastructure that has sufficient capacity, latency, agility and resilience. Transition to the Cloud and expansion of Edge Compute infrastructure are seen as the most practical means of handling this requirement. What started as cloudification of typical consumer applications has now reached a stage where even the underlying networks are being cloudified. Cloud-native 5G platforms are a case in point. According to multiple research reports, the global cloud computing market is set to grow at a CAGR of more than 15% between 2023 and 2030 and reach US$1400 billion by 2030. Similarly, various researchers predict that the edge computing market size is set to explode from ^~US$10 billion in 2022 to upwards of US$130 billion in 2030.

This is impressive progress and we have just scratched the surface. Digital advancement will continue in an unhinged way and will need a strong anchor. Behind the scenes, ubiquitous and competent digital networks will have to stand tall to convert these possibilities into realities. Our task is cut out for us. Collectively, we have to connect the unconnected across the world, fiberise and modernise our networks and deploy them fast. What the world needs and what STL aspires to achieve through its business, are converging to create a powerful opportunity for us. 5G, FTTx, 6G and beyond, optical and digital solutions will continue to drive digitalisation into the far future.

To run this marathon, we need to become lean, agile, focused and build the muscle for delivering quality, at scale. This is what we set out to achieve in FY23 and now we are poised to grow and take a lead in Transforming Billions of Lives by Connecting the World.

Eyes Set on Long-term and Sustained Growth

Early last year, we shared our strategic intent to drive focused growth and followed through with strong execution of the outlined priorities, unlocking agility and financial robustness. In order to increase transparency, we also started segmental financial reporting for our 3 business units namely Optical Networking, Global Services & Digital and Technology (STL Digital).

Optical Networking Business

In our Optical Networking and Connectivity business, we recorded robust growth in both Revenue and EBITDA. We reached a 12% market share in the global ex-China optical fibre cable market by the end of FY23, gaining ^~3% market share in one year. We realised these financial gains on the back of winning multiple long-term contracts from customers in North America. Last year, we set up a greenfield manufacturing

Global Services Business

In our Global Services Business, we took some key initiatives to consolidate our business towards select customer segments, particularly private telcos. We closely worked with leading Indian telecom players to deploy fibre-dense networks for 5G in India. Towards the end of the year, we were able to reach operational break even in the

STL Digital

With a vision to be one of the top IT Services companies, we took some bold steps into the future with the formation of STL Digital which is focused on engineering digital experiences for customers across verticals including telecom, facility for optical fibre cable in South Carolina (USA), which will start commercial production in Q1 FY24. All of these steps have propelled us to move forward in our journey to become one of the top 3 Optical Networking players globally. On the Optical Connectivity (interconnect) front, we continue to look at new markets, new product development and co-create these products with our key customers.

UK region. We also took greater strides towards delivery, skilling and automation in the region and ably supported UKs Project Gigabit. In the Q4 FY23 meeting, we got the Boards approval to demerge the Global Services business. This move, once completed will unlock the path for unconstrained growth for the business.

technology, manufacturing and healthcare. Over the last year, we have built a strong core leadership team of 50+ people and a delivery team of 900+ consultants across the US, UK and a delivery centre in Bengaluru, India.

Business Realignment in FY23

Early in FY23, we shared our strategic intent to drive focused growth. Taking action on this plan, we exited non-strategic businesses in 2022. We divested our IDS business to Hexatronic group for ^~GBP 14 million. We also sold the telecom software products business to Skyvera, an affiliate for US-based Telco DR for US$15 million. In Q4 FY23, we exited the wireless business.

Each of these three businesses, with their own focused strategy and leadership will form the basis of STLs growth in the coming years. Let us now move toward the industry and business performance overview for the three businesses

Grow Optical Networking Business	Consolidate Global Services Business	Build Digital Business
We shall continue to grow the optical business by increasing OFC market share and connectivity attach rate.	Our focus will be to consolidate the Global Services business in the segments of our choice.	We shall continue to build digital business through focused investments toward new technologies and capabilities, especially in the areas of cloud, data security and product engineering.
We have also started projects to optimise raw material and fixed costs for increased operational efficiencies.	We will continue to focus on the private segment, along with driving improved performance and profitability for the UK business.
	We will also continue building new capabilities for technology-led services and drive value through automation and new technologies.

Optical Networking is Gaining Momentum

These are exciting times for the global optical industry. Technology breakthroughs led by IoT, cloudification, AI/ML, etc have brought a remarkable change in consumer behaviour. Fundamental to these new-age technologies is a robust network infrastructure. Network creators now understand that networks of the future must be agile and reliable, if they have to support such advanced use cases. This has led to a significant increase in investment in fibre-dense wireless and broadband networks. This thought of creating an agile and reliable infrastructure is bringing in all stakeholders to work closely. Telecom and Cloud companies are working in tandem, for additional revenue streams that will result in increased profitability. Governments around the world are working towards digital inclusion, to further increase economic activity and deliver citizen-centric services. All these developments indicate that we are in the midst of a decade-long network-build cycle, characterised by a significant increase in investment towards fibre-dense wireless and broadband networks in addition to wireless access points, active network elements, hyperscale and edge data centres. FY23 was a testament to the potential opportunities being created for network builders, however, there were macroeconomic challenges like supply chain issues due to the Russia-Ukraine conflict, mounting inflation and increasing interest rates. Yet, the year saw high investments being made toward digital network infrastructure by telecom companies, cloud companies, governments and in some cases, private equity players.

Looking ahead, global spending on telecom equipment is set to grow by 1% in 2023, despite the decline in overall telco capex. Having said this, the long-term outlook for network investments continues to remain strong. Telecom companies are estimated to invest a substantial US$500 billion in 5G between 2023 to 2025 (The Mobile Economy 2022 by GSMA). A significant portion of this amount is expected to be invested in the fiberisation of towers and small cells to improve the fibre penetration levels. Markets like North America, Europe and South-East Asia are expected to make significant contributions to this journey. Governments have taken the mission of connecting their unconnected citizens through fibre-based broadband with national initiatives like:

US
Rural Digital Opportunity	Broadband Equity,	Other programs
Fund (RDOF) at	Access and Deployment	including Mid mile
US$20 billion	(BEAD) at	program, totaling up to
	US$42.5 billion	US$97 billion

 

GERMANY	UK	INDIA
US$14 billion	GBP5 billion	BharatNet phase
in Bundesverband	in Project Gigabit	3 to connect all
Musikindustrie (BVMI)		600,000 villages

2022 saw the highest-ever global optical fibre cable demand at 534 million Fkm, with China accounting for almost half of the world demand (CRU). The demand surge was led by the US on the back of investments from telecom companies (Tier 1, 2 and 3) and support from the US Government, for the rural connectivity drive. Going forward, it is expected that the US would continue to drive the global (ex. China) demand momentum over the next 5 years. Although there could be some slack in the short term, due to increased inflation, inventory build-up and shortage of skilled manpower for deployment, the mid to long term outlook is positive, considering there is still a long way to go for the US to increase its coverage from existing ^~50% home passes. CRU predicts that the demand for OFC in North America would grow at a CAGR of ^~11% between 2022-25. The bulk of this growth would come from the US.

According to CRU, OFC demand growth in the European region over the next 3 years is expected to be ^~3% and will be led by the UK and Germany, due to their significantly lower fibre penetration levels. Despite lower demand growth, one of the bright spots in this market is the increased import restrictions by the EU on Chinese products, which opens up opportunities for manufacturers from other parts of the world. Indias fibre cable demand in CY22 was mainly on account of investments in FTTH, 5G and national long-distance networks by Tier-1 operators like Airtel and Jio. With an FTTH/B coverage of less than 10%, there is a huge potential for further growth, both in urban and rural areas. It is expected that the issues with respect to the BharatNet execution model would be resolved from CY24. This would act as a huge boost to the regional demand.

According to CRU, OFC demand growth in India, over the next 3 years, is expected to be ^~8%. In addition to India, Australia and South East Asian countries are also expected to add to the APAC Ex-China demand. There is a delay in the China Mobile tender, which may have an impact on the overall demand situation in the short term. Over the next 3 years, CRU expects the global demand to grow at a CAGR of ^~4.7%. The following macro-trends are shaping the strong demand trajectory for optical fibre cables across the globe.

5G deployments remain strong

Global 5G connections surpassed a historic milestone of 1 billion at the end of CY2022, as against 600 million at the end of CY2021. 5G deployment was broadly led by three regions, namely North America, Oceania, East and Southeast Asia and Western Europe. 235 service providers have launched commercial 5G services globally, with 35 standalone 5G networks. More commercial 5G network launches are expected in 2023-24. As their deployment picks up over the next 2 to 5 years, there will be greater demand for fibre, due to increased cell densification (more radio heads per unit area) and fiberisation. According to Omdia and 5G Americas, 5G connections are projected to touch 1.9 billion by 2023 and 5.9 billion by 2027. North America and Western Europe are expected to have the highest 5G penetration rates.

Connections forecast 2023-2027

Active discussions on the 6G roadmap

Though 5G is still in the adoption stage in many nations including India, active discussions on 6G_have commenced. 6G, where the digital, physical and human worlds will seamlessly fuse, 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 to fibre. In terms of timelines, China is planning to introduce 6G applications by as early as 2025. Also, the first commercial 6G network could be available as early as 2030.

Fibre to the home and enterprise continues to grow

The growing adoption of FTTx (Fibre to the home and enterprise) is another important driver of fibre optic demand globally. FTTxs key selling point, as compared to traditional wireless networks, is that it offers high bandwidth with better network stability and reliability. The demand for hybrid working models, along with increased interest in digital transformation initiatives by enterprises, has further increased the importance of having reliable wired connections at homes and offices. Apart from the organic increase in new fibre optic connections owing to these developments, the communication industry is also witnessing the replacement of legacy technologies like DSL and coaxial cables with fibre optic cables. Although significant investments have happened in this space over the last few years, there is still a long way to go for all regions, except China, to increase their FTTH/B coverage rates. In China, as a next frontier to fibre to the home, telcos have launched fibre to the room or FTTR services. In FTTR, the fibre cable network extends to every room in the home, so every room and corner will have gigabit network speed.

Data centre demand sees disproportionate increase

The third most important driver of fibre optic cable demand is data centres. With increasing storage and compute requirements there is a growing need for new data centres - both hyper-scale and edge. According to CRU, it is expected that the hyper-scale data centre operators would double their capital expenditure levels to ^~US$350 billion from 2023 to 2027, leading to a further uptick in the demand for optical connectivity and related products.

Optical connectivity is set to rise along with fiberisation

As fibre connectivity reaches millions of homes and premises, the need for Optical Connectivity products will massively increase. Optical Connectivity products comprise of end-point accessories like joint enclosures, connectors and pre-connectorised solutions.

Imagine a region for dense network deployment in Europe. With millions of homes to be passed, the operators need fast and hassle-free field termination. The scarcity of skilled manpower and high costs necessitate innovation at the end points. Hence, there is a need for plug-and-play Optical Connectivity products and solutions like pre-connectorised cables. These pre-connectorised cables have connectors and other accessories, like enclosures already inbuilt, thereby eliminating the need for patching and splicing for cable termination. This lowers the cost of deployment and also speeds up the entire process. Owing to the ambitious rollout targets and lack of in-house expertise, most of the customers value partners who can provide all these solutions in an integrated fashion. This opens up a new set of opportunities for players like STL. These products are margin & return accretive and have a market size bigger than the optical cables. According to our estimates, the global Optical Connectivity market size currently stands at ^~US$10 billion and this market is expected to grow at a much faster pace than optical fibre cables.

Progressing towards becoming one of the top 3 optical players globally

Our ambition is to become one of the top 3 optical players globally (Ex- China). We have been building global capabilities, solutions and teams to achieve this milestone. To realise this vision we took the following initiatives in FY23:

Gaining market share in our focus markets

We are focused on long-term partnerships with customers in the US, EMEA and India, for their 5G and FTTH rollouts. In FY23, we were able to build strong relationships with our customers across our focus markets. These efforts led us in accruing a 12% market share globally (ex-China). In Europe and UK, we deepened our existing engagements and also partnered with 20 new customers, closing FY23 with orders valued at ^~_2,400 crore. In India, we worked with top telecom operators for their pan-India fibre rollouts, winning orders worth ^~_1,000 crore.

Increasing Optical Connectivity attach rate

In FY21, we acquired Optotec in Italy and entered the passive Optical Connectivity market. Since then, we have experienced consistent growth. We measure this growth through attach rate - which is the percentage of Optical Connectivity product revenues bundled with optical fibre cable revenues. By the end of FY23, we have reached a 10% attach rate from a negligible attach rate in FY20.

Optical Connectivity growth framework

Going forward, we shall adopt a four-pronged approach to grow Optical Connectivity. The first step is to offer connectivity solutions to our existing accounts, particularly in the European market. As a next step, we have started going through the product approval cycle in new markets. Our third step will be to develop new products, for an entirely new customer segment e.g. Cloud and the fourth step will be to scale tuck in acquisitions in strategic markets.

Disproportionately focusing on developing "Industry First" solutions

To forge deeper and enduring relationships with our customers, we are continuously investing in R&D to develop and launch industry-leading new products. Last year, we launched Multiverse, our multicore fibre. This has 4X the transmission capacity than normal fibre with the same diameter. This greenest-ever optical fibre reduces cable surface area by ^~75% and plastic in the ground by ^~10%. We were also among the worlds first companies to launch 180-micron optical fibre and cable, our slimmest product yet. This fibre enables the smallest diameters in cables with the highest fibre densities. As the service providers densify the network with more fibre, duct space will be a precious asset. That is where STLs high-density micro cable will help operators to pack more capacity in limited duct space, thereby reducing costs and deployment times.

Greenfield OFC capacity in the US

In order to get closer to our customers, we have established a world-class Greenfield optical fibre cable manufacturing facility in South Carolina, US. This facility will produce high-end ribbonised cables that are essential for high-capacity and fast deployment in North America. We have also started commercial production from this facility and continue to increase its utilisation.

Lastly, as we move forward, we will continue to increase utilisation and sweat assets in the short term, grow Optical Connectivity in the medium term and continue to add capacity backed by customer commitments over the long term. With these clearly outlined priorities for the Optical Networking business, we are confident of gaining further momentum and getting closer to global leadership in this business.

Optical Networking Growth levers

Global Services is Set to Play a Pivotal Role in Digital Transformation

In the coming years, building and managing networks and IT infrastructure will be a cornerstone of digital transformation in our businesses and countries. Lets take the example of India, where the bulk of the demand for optical fibre cables is driven by Tier-1 telecom operators such as Bharti Airtel and Reliance Jio. This demand is set to see an uptick with the recent successful auction of the 3.5 GHz, 5G band. Last year, in October 2022 both operators launched 5G services. While Airtel has deployed 5G in non-standalone mode for homes, Jio has gone ahead with the launch of 5G services in a standalone mode. Both operators have covered more than 3,000 towns in India and are expected to cover all the cities by the end of 2023.

Fiberisation of towers and small cells is crucial to get the true 5G experience. It is expected that the telcos would deploy ^~2,00,000 cable km across the national long-distance network, access network and FTTH rollout in the next 18 to 24 months. In terms of value, Indian Telcos are expected to spend ^~US$1.5 billion to US$2.5 billion for fibre rollouts in the next 2 to 3 years. The fiberisation space is not constrained by intent or capital. It is now hinging on fast and high-quality deployments. In a highly fragmented fibre roll-out services market, the presence of pan-India players like us, with significant technological capabilities and project management experience, can add great value for the telcos. Further, BharatNet - 3 would significantly expand the fibre roll-out services market size in India. Apart from fibre roll-out opportunities, we continue to pursue system integration opportunities that come from various government departments, public sector enterprises and defence. Coming to the UK market, we are partnering with tier-1 telcos and alt-nets to deploy fibre to the premises network. As per various Industry estimates, FTTH home pass for 2023 is expected to be 4.8 million homes as compared to 4.7 million homes passed in 2022.

STL Global Services business poised for unconstrained growth

India

As the 5G deployments in India pick up pace, we are partnering with leading telcos to deploy fibre-dense networks. We are one of the preferred partners with Airtel and are closely working with another private player in the country. On the back of our long-standing partnerships, we continue to win new orders for fibre deployment. If one looks at our revenue share from private telcos, it has gone up from 31% in FY22 to 43% in FY23. In addition to fibre deployment, we are also building capabilities toward value-added services to improve the margin profile. We are also improving our execution speed to reduce net fund involvement days for India Services.

UK

In the UK, We are working with the leading telecom and broadband service providers, ably supporting Project Gigabit, which aims to drive full fibre connectivity to homes and premises. One of the key highlights in the UK, for us, has been achieving operational break even in the month of March, 2023. We aim to be profitable in FY24. Our sales engine is focused on increasing wallet share from existing customers and our delivery engine, on operational efficiencies. Our project execution, both in India and the UK, is going as per plan.

Global Services Demerger

To unlock the future growth potential of this business, STLs Board of Directors recently approved the demerger of the Global Services business into a separate legal entity, on a going concern basis. This decision, once approved by the shareholders and regulators, will create an industry-leading business that will drive large-scale network and IT infrastructure projects with sharp customer focus and agility. The shareholding of STL and the new entity will mirror each other and the new entity will be publicly listed.

IT Services and Digital

Transformation to Grow Unabated

2022 has been a good year for the global enterprise software & IT services industry. According to Gartner, global IT spending is forecasted to reach ^~US$4 trillion in 2023. The market is expected to grow by a single digit, on the back of investments in digital transformation initiatives as well as cloud adoption. Such growth has been possible in spite of adverse macroeconomic developments like the Ukraine-Russia war, continuing slowdown due to the pandemic which resulted in rising inflation, increased interest rates and layo_s across the tech industry. This further reinforces the resilience of the IT services industry even in the face of external challenges.

Key technology trends that continue to shape this industry are:

Sustainable product engineering

With increasing emphasis on reducing carbon footprint, minimising waste and optimising resource utilisation, organisations are expected to focus on sustainable product engineering practices, such as eco-design, life cycle assessment and circular economy principles.

Edge computing and real-time analytics

Organisations will increasingly adopt edge computing for data analytics and AI, enabling processing and analysis of data at the edge of the network, closer to the devices or sensors generating the data, particularly relevant in industries such as manufacturing and healthcare.

Ethical AI and responsible data analytics

Increased emphasis on ethical AI, including fairness, transparency and accountability in AI algorithms and models is expected to gain momentum. Data analytics practices may also be guided by responsible data management principles, including data privacy, security and consent.

Data privacy and security

With increased focus on data privacy and security in enterprise SaaS solutions and stricter compliance and regulations, organisations may demand robust data encryption, access controls and data governance in their SaaS applications to ensure the confidentiality, integrity and availability of their data.

Personalisation and hyper-personalisation

Companies are already using AI-driven recommendation engines, predictive analytics and customer segmentation to understand individual customer preferences and deliver tailored experiences. This trend is further expected to gather steam as companies go more granular on data-led customer insights.

Collaborative and agile product development

Product engineers need to work closely with other functions such as design, manufacturing and supply chain, while adopting agile methodologies and collaborative tools to enable efficient and effective product development processes.

Hybrid work model fuelling cloud adoption

Gartner estimates that spending on desktop-as-a-service will reach US$3.2 billion in 2023, as companies shift away from traditional client computing to subscription-based virtual desktop services. This trend is seen across a wide range of cloud services. Cloud-based tools for communication, project management, video conferencing, file sharing and knowledge management, will also gain more traction going forward.

All of these trends will lend speed and scale to digital transformation initiatives across private and government enterprises. Agility will play a key role in the IT Services sector, going forward.

STL Digital on the path to unlocking scale

To explore the full potential of the IT services Industry and to pivot from niche telecom software to broader IT services, we onboarded Mr. Raman Venkatraman. He is an industry stalwart with more than 30 years of experience and has generated and delivered billion-dollar global IT services in the past. With a focus on agility and talent, Raman started building a core leadership team and technology capabilities to cater to industries like telecom, technology, manufacturing, healthcare and more. As we progressed, we decided to exit the niche area of telecom billing software business and sold this business to Skyvera, an affiliate for US-based Telco DR for US$ 15 million.

We are excited to share that over the last 12 to 15 months, we have come very far and have built a strong core leadership team of 50+ people and a delivery team of 900+ consultants. We have opened a delivery centre in Bengaluru, multiple offices in India, the US and the UK, along with two customer experience labs. We have acquired 18 global customers and delivered revenue of _70 crore in FY23 and an open order book of _649 crore at the end of Q4 FY23.

We have decided to focus on the following Industry verticals

Technology

Life science, Healthcare and Manufacturing

Communication, Media and Services

Consumer Industry

Energy, Resources and Utilities

With years of multi-industry experience, our core leadership team comes in with deep domain expertise and deep customer connections. One of our core strengths is strong technology capabilities and advanced certified competence across cloud, data, SaaS and cyber security along with ecosystem alliances and investments. This clubbed with our promise of agility, has helped us to differentiate ourselves and win customer orders in FY23.

Our agility and ability to provide differentiated customer experience shall help us grow further on a QoQ basis. In order to reduce losses, we are working to improve utilisation & offshore/onshore revenue mix.

Delivered on Financial Priorities in FY23

In FY23, we delivered our financial priorities. We grew revenue from continued operations by 27% to _6,925 crore and EBITDA by 29% to _931 crore. One of the key reasons for the same, is our focused growth strategy, specially tuned towards the optical business. The optical business revenue grew by 46% to _5,439 crore and EBITDA by 93% to _1,045 crore, in FY23. Key drivers for margin improvement were optical fibre cable volumes and pricing gain, product mix shift to higher margin products and reduction in logistics costs. In FY24, we shall continue to put our efforts to optimise raw material and fixed costs.

In services, our FY23 revenue stood at _1,511 crore and EBITDA stands at _47 crore. Going forward, as the UK operations have turned profitable, this should help in improving profitability. In FY24, we shall continue to work to improve net fund involvement by improving execution and adding capabilities in high-tech value add services. In the digital business, we are growing QoQ on revenue. Overall, we delivered _70 crore in revenues in FY23. In FY24, we shall continue to invest in this business to grow revenues on a QoQ basis. We are also working on improving utilisation and revenue mix to become profitable.

Our order book is stable at _11,052 crore at the end of Q4 FY23. We had a record year in terms of new orders won, in FY23. Our revenue mix is shifting to customer segments and geographies of our choice. We are increasing our share in the Telco segment. In terms of geography, we are increasing our share in the Americas and

European markets. It is heartening to note that in line with our strategy, we have increased our revenue contribution from the American market from 13% (last year) to 38%. Again, this is a reflection of our product innovation and the reward of investment in R&D over the years. In FY24, we aim to grow revenue by 10% to 12% and move towards net debt/EBITDA of less than 2.5fitimes.

As we enter the new financial year, customer centricity, technology innovation and sustainability will be the cornerstones of our growth. Our world-class leadership and global talent are driving the Company towards our ambition of becoming one of the top 3 optical players in the world while living our purpose of

Transforming Billions of Lives by Connecting the world.