Sterlite Electrice Ltd (SPTL)

Are you looking to invest in a company that is at the heart of India’s renewable energy revolution and a global leader in power transmission? Sterlite Electric Limited (formerly Sterlite Power) is a leading global developer of power transmission infrastructure with projects spanning over 12,500 circuit kilometers (ckm) and 22,719 MVA in India and Brazil. With an industry-leading portfolio of power conductors, EHV cables, and OPGW, Sterlite Power is a key enabler of the global energy transition.

Backed by a strong order book, a recent CRISIL rating upgrade to AA-/Stable, and a strategic demerger to unlock value, Sterlite Power presents a compelling investment opportunity in the critical infrastructure space.

1. Company Overview: A Global Power Transmission Powerhouse

• Legacy: Formerly Sterlite Power, now named Sterlite Electric Limited.

• Global Footprint: Operates power transmission projects in India and Brazil.

• Scale: Portfolio includes over 12,500 circuit km of transmission lines and 22,719 MVA of transformation capacity.

• Product Portfolio: Industry-leading manufacturer and solutions provider for:

  • Power Conductors

  • Extra High Voltage (EHV) Cables

  • Optical Power Ground Wire (OPGW)

• Solutions: Offers solutions for upgrading, upgrading, and strengthening existing power networks.

• Innovation: Known for setting new benchmarks through cutting-edge technologies and innovative financing structures.

• IndiGrid Sponsor: Sterlite Power is the sponsor of IndiGrid , India’s first power sector Infrastructure Investment Trust (InvIT), listed on the BSE and NSE.

2. Key Milestones & Historical Highlights

FY18-19 Highlights

• Consolidated Income: ₹3,571 Crores.

• Circuit KM: 12,500 ckm.

• Asset Availability: 99.84% , a testament to operational excellence.

• Project Portfolio: 22 infrastructure projects (12 in India, 10 in Brazil).

• Transmission Towers: 11,300 towers in its portfolio.

FY19-20 Highlights

• Consolidated Income: ₹5,158 Crores.

• Circuit KM: 13,700 ckm.

• Asset Availability: Maintained at 99.84% .

• Asset Sales: Concluded sale of three Brazilian assets (Arcoverde, Novo Estado, Pampa).

• New Project Wins: Added three Inter-State Transmission System (ISTS) projects worth ~₹3,600 Crores.

FY21-22 Highlights

• Project Wins: Won 30 transmission projects under the PPP model (17 in India, 13 in Brazil). 16 of these are operational.

• Circuit KM: ~13,976 ckm of lines commissioned or under construction.

• Market Leadership: 31.5% market share by tariff of inter-state projects awarded under competitive bidding in India.

• Asset Availability: 99.78% in Q4FY22.

3. Financial Performance: Strong Growth & Profitability

FY21-22 Performance

• Revenue: ~₹6,000 Crores (up from ~₹3,800 Crores in FY21).

• Profit After Tax (PAT): ₹440 Crores (down from ₹870 Crores in FY21, reflecting a high-base effect or specific project phases).

9MFY23 Performance (vs. 9MFY22)

• Revenue from Operations: 37% higher .

• EBITDA: 8% higher .

• Balance Sheet Size: 60% higher .

FY25 Performance (Post-Demerger)

• Revenue: ₹4,763 Crores.

• ROCE: Maintained at 20%+ , indicating strong capital efficiency.

• Order Book: A robust ₹6,675 Crores , providing strong revenue visibility.

4. Recent Developments & Strategic Updates

A) CRISIL Rating Upgrade (April 15, 2025)

• Action: CRISIL upgraded Sterlite Power’s long-term rating to AA-/Stable and short-term rating to A1+ , removing it from rating watch.

• Reason: The upgrade follows the demerger of the EPC business, allowing Sterlite to focus on its high-margin solutions segment. It was also backed by a ₹725 crore equity infusion and improved working capital efficiency.

B) Demerger of Infra Business into Sterlite Grid 5

• The infrastructure business of Sterlite Power has been demerged and transferred to a newly formed company, Sterlite Grid 5 Limited .

• Result: Sterlite Power (now Sterlite Electric) will retain the Global Product business (conductors, cables, etc.).

• Financial Restatement: Financials for FY23 and FY24 have been presented based solely on the continued operations (the products business), making past data not directly comparable but reflecting a more focused entity.

C) Business Highlights (Q3 & 9M-FY23)

• New Project Acquisition: Acquired Kishtwar Transmission Limited from PFC to build a GIS substation in J&K.

• Project Commissioning: Completed the 329 km Lakadia Vadodara Transmission Project (a Green Energy Corridor) in January 2023.

• Asset Flip Strategy: Executed documentation for the sale of the commissioned Khargone Transmission project to IndiGrid for ₹1,497 Crores , demonstrating its successful build-sell-operate model.

• Brazil Wins: Won two new projects in Brazil worth ~₹1,900 Crores.

• Order Wins: New order wins in Products, MSI, and Convergence business units totaled ₹3,777 Crores in the first three quarters of FY23.

D) Capital Raise

• Secured ₹305 Crores debt funding from NIIF-backed Aseem Infrastructure Finance for the Kishtwar project.

• Received fresh working capital limits of ₹250 Crores from IndusInd Bank.

• Closed a second successful issuance of Green Debentures worth ₹600 Crores by its Brazilian subsidiary.

5. Future Outlook: Riding the Renewable Energy Wave

The future for Sterlite Power looks exceptionally bright, driven by India’s massive renewable energy targets.

• Government’s ₹2.44 Trillion Plan: In December 2022, the Government of India unveiled a ₹2.44 trillion ($29.6 billion) plan to build new power transmission lines to connect renewable generation, aiming to nearly triple clean-power capacity by 2030.

• ISTS Bid Pipeline: Approximately ₹520 billion worth of transmission line bids are in the pipeline from the National Committee on Transmission (NCT).

• Management Commentary: As stated by MD Pratik Agarwal, the power transmission sector is on an “upward trajectory,” driven by the urgent need to integrate ~500 GW of Renewable power by 2030 . The ISTS segment alone requires an estimated investment of ₹2.44 trillion, spelling an enormous opportunity.

Current Sterlite Power Unlisted Share Price

• Unlisted Share Price: ~₹665 per share .

• Earnings Per Share (EPS): ₹72 per share .

• Share Price: Please check the Unlisted Network Android or iOS mobile app for the latest traded price and historical data.

Key Investment Highlights

1. Global Leadership: A leading global developer of power transmission infrastructure with a significant presence in India and Brazil.

2. Critical Role in Energy Transition: Perfectly positioned to benefit from India’s massive ₹2.44 trillion plan to build transmission infrastructure for 500 GW of renewable energy by 2030.

3. Strong Market Share: Commands a 31.5% market share in competitively bid inter-state transmission projects in India.

4. Robust Order Book: Holds a strong order book of ₹6,675 Crores (for the continued products business), providing clear revenue visibility.

5. Excellent Operational Track Record: Consistently maintains asset availability above 99.7% , demonstrating world-class operations.

6. Proven “Asset Flip” Model: Successfully develops, builds, and sells assets to its InvIT (IndiGrid), generating strong returns and recycling capital.

7. CRISIL Rating Upgrade: Recently upgraded to AA-/Stable, reflecting improved financial health and business focus post-demerger.

8. Strong Financials: Maintained 20%+ ROCE in FY25, indicating high capital efficiency.

Risks to Consider

1. Regulatory & Policy Risk: The transmission sector is heavily dependent on government policies, bidding processes, and regulatory approvals.

2. Execution Risk: Successfully executing large, complex infrastructure projects on time and within budget is challenging.

3. Debt Levels: Infrastructure development is capital-intensive and typically involves high debt. Investors should monitor debt servicing capability.

4. Geopolitical Risk (Brazil): Operations in Brazil expose the company to currency fluctuations, political instability, and local regulatory changes.

5. Post-Demerger Performance: The performance of the newly focused products business (Sterlite Electric) needs to be tracked separately from the demerged infra assets.

6. Competition: Faces competition from other large infrastructure developers and public sector entities.

7. Unlisted Liquidity: As an unlisted company, shares are not traded on public exchanges, and liquidity may be limited.

The Opportunity: Own a Stake in a Company Powering India’s Green Energy Future

Sterlite Power (Sterlite Electric) offers a unique opportunity to invest in a global leader at the forefront of the energy transition. With a massive government-backed growth pipeline, a strong order book, excellent operational track record, and a focused business post-demerger, Sterlite is poised for significant growth. For investors seeking exposure to India’s critical infrastructure build-out, Sterlite Power is a compelling addition to a diversified portfolio.

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