Sterlite Technologies Limited (532374) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Sterlite Technologies Limited Q1 FY '27 Earnings Conference Call. [Operator Instructions] Please note that this conference call is being recorded. I now hand the conference over to Mr. Rahul Darak, Head of Investor Relations. Over to you, sir.

Good day, everyone, and welcome to STL's Q1 FY '27 earnings call. To take us through the results and answer your questions today, we have with us STL's senior management represented by Mr. Ankit Agarwal, Managing Director; and Mr. Ajay Jhanjhari, Group CFO. Before we proceed with the call, let me remind you that the discussion today may contain forward-looking statements that may involve known or unknown risks, uncertainties and other factors. It must be viewed in conjunction with our businesses that could cause future results, performance or achievements to differ significantly from what is expressed implied in such forward-looking statements. Please note that we have uploaded the results and earnings call presentation on a STL's website and the same is available on the stock exchanges. We'll start the call with a brief overview of the quarter gone past and then conduct the Q&A session. With that said, I'll now hand over the call to our Managing Director, Mr. Ankit Agarwal.

Thank you, Rahul. Good day, everyone. Thank you for joining STL's Q1 FY '27 Earnings Call. I'll begin by highlighting the key takeaways from our investor presentation, and then Ajay will walk through the financials. STL is a global leader in digital connectivity infrastructure, serving data centers, telcos, risen networks and large enterprises. Our optical connectivity solutions span fiber to fiber cable, specialty cable and connectivity solutions, where India is #1 end-to-end optical manufacturer with 9% optical cable market share outside of China. With over 30 years of leadership, more than 785 patents and 10 plus 0 waste to manufacturing facilities worldwide, STL is leading the next we have a global digital infrastructure. At STL, we are amongst the very few companies in the world who have mastered the journey from glass to gigabit. It starts with the purest greater silicon, which we transformed through advanced processes like silicon tetracaiormation, chemical vapor deposition and high presence entering to create ultra-pure large preforms, which is the backbone of optical fiber. From there, we draw the highest grade fiber, design high-density cables and develop reliable connector products that power data centers and telecom networks worldwide. This full stack integration right from raw material to network deployment. gives STL a unique edge in quality, cost and efficiency and innovation across the connectivity value chain. This deep integration enables us to engineer next-generation fiber cable and connectivity solutions that are redefining global connectivity. Our end-to-end innovation from materials Sanchesmart optical systems help global network builders create faster than so and more reliable networks for the AI era. As we step into FY '27, our core strategic priorities have evolved and are delivering tangible results. on driving market share and attach rates in our core optical business, we are actively pivoting towards increasing our revenue share from integrated connectivity solutions in partnership with key customers with data centers emerging as a critical growth engine for the entire industry, we're sharply focused on scaling this segment underpinned with our continued technology leadership. This commercial momentum, paired with our disciplined focus on option and cost efficiencies will drive margin expansion as we head into the rest of the fiscal year. Moving on, we'll now speak about the industry tailwinds and the growing market opportunity. As you all know, we are at the intersection of 3 powerful multiyear investment cycles. FTTX, data centers and 5G/6G network, creating a strong structural tailwind for optical infrastructure. FTTX is accelerating globally with deployments rising from 151 million fiber kilometers 2025 to about 171 million fiber meters by 2030. In the U.S. alone, more than 140 million homes will be served by fiber to 2030, supported by large government programs like bead in the U.S. and BharatNet in India. Data centers are the fastest-growing driver of fiber demand. CRU projects are massive 63% global growth in optical cable demand from this segment in year 2026 alone, driven by hyperscale expansion and AI workloads. North America installed DC capacity expected to double from 63 gigawatts in 2025 to 126 gigawatts by 2030. Morgan Stanley and Western Bank has again upgraded their focus on hyperscale CapEx from 765 billion to 805 billion, increasing the TAM of our optical connectivity. Concurrently, the scaling of 5G and 6G networks demand deep network densification with global 5G subscriptions expected to hit 6.4 billion by 2030. India's 5G subscriptions expected to hit 1.1 billion by 2031. And then the Global 6G subscriptions forecasted to cross 180 million by the end of 2031 which is about 4 to 5 years away. Together, these 3 cycles are creating a structural multiyear tailwind for fiber and connectivity solutions, positioning STL at the center of the next global digital infrastructure build-out. Next, on Slide 10, you will see how some of the big global telecom and technology giants are aligned and backing optical fiber as the base of digital future across 6G broadband dealer centers, and the AI infrastructure. The takeaway is simple. Fiber remains as the core backbone of all digital infrastructure coming up. Moving on to Slide 11. It shows how the AI revolution and rapid data center expansion creating a once in a generation opportunity for optical connectivity. For Mackenzie, consulting firm, by 2030, 70% of data center demand will be AI led, driving a sharp increase in CapEx and infrastructure intensity. GPU architectures are rapidly shifting from 400 gig to 800 gig and going all the way to 1.6 terabyte speeds where copper reaches a bandwidth threshold and fiber becomes even more essential. Increasing our time by 10 billion for optical connectivity. Simultaneously, AI workloads are creating dense fiber interconnections, significantly increasing fiber per rack and every new data center added exponentially multiplies this demand. This is not just a matter of scale. It's a step change in fiber intensity. With STL's neural end-to-end AI DC portfolio, STL is uniquely positioned to capture this multiyear structural growth opportunity. Coming to India data center environment. Data center expansion here in India is emerging as 1 of the most compelling structural tailwinds for optical fiber. Installed capacity is set to grow almost sevenfold, expanding from 1.6 gigawatts currently to almost 10 gigawatts by 2031, per Morgan Stanley. What makes this investment cycle particularly powerful is the breadth of commitment. going from hyperscalers like Google Meta, Microsoft, which are deploying ten of billions of dollars on their side. We also have the Indian co governments like the TCS, Adani and Reliance laying out long-term capacity plans. Over the last quarter itself, we have seen new announcements coming from the likes of Meta and Reliance with a massive floor deployment plans in India. We've also seen Australia's air trunk coming in with almost -- again, a multibillion-dollar commitment in Maharashtra and Andhra Pradesh to build close to 5 gigawatts of data center capacity. A supportive policy environment, state incentives, tax incentives, power availability and the holiday -- tax holidays that are extended up to 2047, are further derisking and accelerating the build-out in India. Every dollar of data center CapEx are a direct multiplier on fiber intensity across DCI, metro and long-haul networks. With optical cable demand projected to grow at 11% CAGR through 2030. This is not a cyclical uptick but a durable high visibility growth opportunity playing out in our home market in India. As per CRU, the global cable demand market for this year has strengthened significantly and is projected to accelerate to 8.2% year-on-year, led mainly by North America's data center build-out and improving execution in India. Importantly, demand is now consistently outpacing domestic supply in North America and on the lead times that are continuously getting tight. Looking ahead, North America, as said, will be the main growth engine powered by AI-led data centers. data center interconnect builds and continued F3 expansion. CRU expects to deliver the strongest regional CAGR of 18.6% between now and 2030. A major update against earlier forecast of 15% CAGR. Overall, these points to sustained multi upcycle and fiber demand with North America and APAC, ex China, which are all core focus areas for STL, which are driving growth. We are also seeing positive momentum in IndeSoutheast Asia and parts of Europe, which are close in with our strategy. We are successfully seeing new market opportunities, a trend that is clearly demonstrated by record-breaking order intake this quarter. In quarter 1 alone, we secured orders were INR 13,100 crores, which is 1.7x the total order wins of INR 7,687 crores recorded in the entire financial year last year. The momentum is anchored by a landmark multiyear $1.1 billion deal with a global hyperscaler to supply optical connectivity products for next-gen AI data centers through FY '29. Furthermore, we secured multiple $100 million dollar hyperscale orders for high fiber count IBR cable solutions. Alongside these hyperscale events, we also expanded our footprint in long-haul applications by securing a strategic order with a major connectivity infrastructure provider. Importantly, our order book today is well diversified, reflecting a healthy mix of order intake from all customer segments and product categories across regions. Innovation continues to be a key differentiator for STL. In this quarter, we made significant technology strides to power the AI and hyperscale data center aero, more of which you will see in the coming slides. Building on the momentum of a flagship AI era, data center portfolio, we achieved U.S. Connect certification for delivering MMC pre-terminated solutions to hyperscale customers. crush, we are pleased to share that we have secured a definitive victory in a European patent dispute with Fujikura. And this matter now be conclusively resolved in STL's favor. This effectively brings the U.K. litigation related to our Celeste cable family to a close. This removes all legal uncertainty around these products and fully cover the path for our data center and telecom business. Our product development engine was also highly active this quarter. In optical connectivity, we launched Concat, a iceless plug-and-play solution designed for dramatically lowering the FTTH installation costs. Our innovative engine is backed by a deep IP portfolio of more than 785 patents with 9 new filings this quarter, and we have been recognized through multiple global awards. Overall, these advancements reinforce our position as a technology leader, building future-ready capabilities and align closely with our AI cloud and high-performance network demand. Turning to our product portfolio. We're making tremendous progress with Neuralis, our purpose build portfolio for the AI era of data centers, which addresses 2 mission-critical needs, AI whitespace connectivity and high-speed AI where fiber density, speed and simplicity matter the most. A major milestone this quarter is that we have achieved the let U.S. Connect certification of 4 MMC predominate solutions. delivering a massive 3x increase in cable density over additional layouts to support high-density AI workloads. With this certification, STL becomes the few global players offering certified MMC preterminated fiber trunks, are cards and assemblies, significantly strengthening our portfolio and directly addressing cable congestion for hyperscalers scaling to 800 year and beyond. By leveraging STL's fully mitigated integration, dualist enables faster deployment and massive GPU clustering. It reduces deployment complexity and accelerates the time to service, supported by our local manufacturing facility in South Carolina, this launch enters our position in the U.S. with both the hyperscalers as well as the upcoming new cloud providers. Slide 18 highlights STL's leadership in the next-generation optical fiber portfolio. It directly addresses the optical physics demands of the EI DC era through 3 flagship technologies. Firstly, our G.654.E fiber now fully commercialized and delivered 30% lower senior loss. Second, hollow-core fiber, which got latency up to 47% to accelerate AI data center interconnect. And finally, our award-winning multi-core fiber, which expands our data capacity between 4 to 7x with the same footprint. With the successful deployments of multicore fiber already underway in India and the U.K. alongside partners like CBOT IIT Madras and cold in the U.K. This firmly positions STL to power the high density ultra-latency infrastructure required for tomorrow's AI workloads. Moving to market-led innovation. On cat is redefining U.S. FTTH deployment economics for new builds, expansions and overbuilds. By shifting fiber preparation to control factory environments, its true plug-and-play modular MPO to LC architecture enables completely splices installation. This flashes labor costs by up to 71% and by eliminating the field pricing and reducing reliance on skilled labor. Already feel validated with top-tier U.S. telecom operator and recognized by the Lightwave Innovation Awards, Concat delivers faster time to revenue with significantly fewer truck rolls and lower operational risk. Strategically scaling Comcast allows us to drive higher attach rates for optical connectivity with our fiber cables expanding our revenue and deepening our margin profile with key U.S. customers. Our market position and attach rate trends, our global ex China OFC market share increased to 9%, demonstrating our resilient execution, steady market expansion despite broader environmental challenges. On optical connectivity to share that our attach rates increased 16% on a much larger OS revenue base compared to 15% last year. The long-term opportunity in Connect remains robust as the portfolio expands and we continue to successfully pivot towards selling higher-value integrated solutions other than loan products. Looking ahead, we are focused on further increasing our tax rate of above 20% from next quarter onwards and to 25% by the end of this financial year. Taken together, this shows that our core PC business remains solid and our attach led growth strategy gaining clear traction in coming quarters. Now I'll hand over to our CFO, Ajay to take you through the financials.

Thank you, Ankit, and thanks to everyone for joining us today. I am happy to take you through our financial highlights for Q1 FY '27. solid quarter, we STL delivered its highest ever performance across revenue, EBITDA impact. Revenue reached INR 1,910 crores, representing an extraordinary 87% year-on-year growth. On profitability, having previously guided for a 20% EBITDA margin by the end of FY '27, I'm proud to share that we delivered on this right here in Q1 with INR 397 crores in EBITDA which is up 184% year-on-year. We are now revising our EBITDA margin guidance upward to 23%. Finally, PAT came in at a record INR 197 crores, reaching 10% of revenue. our highest PAT margin level, which represents a massive 5x expansion over full year of FY '26 PAT. Overall, this performance reflects our unwavering focus on disciplined growth, margin expansion and stronger bottom line books as we enter the new financial year. On the segment side, while telecom and citizen networks continue to be a core pillar. Our data center segment saw strong growth, contributing 21% this quarter, up from 1% in FY '26. Looking ahead, we expect the combined data center and enterprise segment to scale up to 50% of the revenues in the current fiscal, well above the 30% guidance provided in our previous earnings call. From a geographic standpoint, our revenue mix continues to reflect strong global momentum. North America share expanded significantly to 54% in the second quarter, up from 39% in FY '26, driven by a robust demand. Europe contributed 25%, while the rest of the world held steady at 22%. This balanced regional footprint reduces concentration risk and positions as well to capture growth across key global markets. . Moving to the open order book. We have seen strong momentum this fiscal. Our open order book stands at a record high of INR 18,618 crores, up 2.4x from the last quarter. reflecting healthy order inflows and a strong market confidence. Of this, INR 2,228 crores are slated for execution in Q2 of FY '27. While the remaining INR 16,390 crores is scheduled for execution over Q3 FY '27 and beyond. This robust order pipeline provides strong revenue visibility and reinforces our growth outlook for the year. On Slide 26, we have shared and bridge snapshot of our reported numbers for their reference. On balance sheet, the net cash balance stands at INR 483 crores, achieving the status of net debt-free company. Additionally, I'm glad to share that strengthened balance sheet position is now reflected through press revised rating outlook to stable and Deka upgraded the rating to AA stable. Moving on to our capital structure. STL successfully completed a landmark QIP of INR 1,500 crores to fund our next phase of growth. The issue received strong market reception with the book being subscribed more than 2.5x, strengthening our institutional holdings to a fresh historic high of 33%. We witnessed robust participation from leading domestic and global institutional investors, including market names such as Nomura, HSBC, Motilal Oswal and Bank of India, among others. We are allocating 75% of proceeds towards reduction of debt, while the rest of it going towards general corporate purposes. This successful capital raise significantly strengthens our financial foundation as we execute our long-term road map. With this, now I hand it over back to Ankit for updates on our social responsibility initiatives and closing remarks.

STL CSR initiatives continue to create deep, lasting and measurable impact across health education women empowerment and environmental sustainability. In education, the Indian CSL award winner in Robomate to over 12 schools and 10,000 students, equipping them with next-gen robotic skills. And women empowerment, our Jeevan Jyothi initiative has trained over 6,500 women in vocational skills. We remain firmly committed to driving sustainable growth and building future-ready communities. Our flagship health care program, Satsu has now impacted 27 lives across -- 27 lakh lives across Maharashtra and expanded Richfood into Silvassa. At STL sustainability is central to our purpose and we're proud to hold a synergy SA rating and are committed to achieving net 0 emissions by 2030. Our strategy is built on 3 pillars: environmental sustainability. In FY '19, we have diverted 286 lakh metric tons of waste, recycled almost 11.6 million cubic meters of water and reduced over 45,600 metric tons of carbon dioxide equivalent to energy efficiency. Over 32% of our procurement is local and our partnership with Hygo for advanced green hydrogen and oxygen plant has been commissioned and successfully supplied. We're also actively looking at enabling all our operating footprints to be sourcing green energy. In terms of social responsibility, we are aligned with the 16 United Nations SDGs and we positively impacted more than 920,000 lives through education, women empowerment and healthcare alongside installing 4,500 kilowatt power of solar capacity. Strong governments with the 2 of the big 4 auditors and robust governance committees, we've earned 100-plus ESG awards since FY '19. Notably, STL is the world first update the fiber manufacture certified for 0 liquid recharge and below-water landfill setting a true industry benchmark globally. Let me close with our focus areas. Our goal is to keep driving technology and cost leadership, drive sales of integrated connectivity solutions in partnership with key customers and scale our data center business. to strengthen our role as a key enabler of global digital infrastructure. With this, I will close my opening remarks and hand over to the operator to open the floor for questions. Thank you.

[Operator Instructions] The first question is from the line of [ Mr. Achen ] from Nuvama.

Congratulation for excellent earnings. My first question is, if you could talk about what was the classic utilization in the first quarter and in terms of the order inflow, if you could talk about the ordering, whether it is U.S. or Europe, are we like at the back end of the ordering or it's still work in progress? I mean how do you see that given the big numbers, what we hear about the Air India, the data center CapEx. Are those ordering behind us? Or it still yet to happen in a meaningful time?

Yes, thank you, [ Achen. ] So I think both parts when we look at the capacity utilizations. We don't share -- we don't disclose actual numbers. But as we've been sharing over the past few quarters, we -- we continue to see that our capacity utilization is improving quarter-on-quarter. So that's a positive development. And we continue to see that going forward as well. And in terms of our order inflow, yes, we're proud and happy with the orders that we've received, the connections with our customers. And we continue to feel positive about future orders as well, both on the telecom sector as well as on the data center and enterprise segment.

Ankit, the question was in terms of the ordering, while you have given a very qualitative answer, but I'm just curious to know, typically, the cables are required during the execution of that data center. So is the ordering been through or it's probably not even midway through at the industry level, I mean?

So -- from a data center CapEx, if you just look at the hyperscalers as well as the new clouds, I mean, many of them are basically talking about multiyear investment in the data center capacity build-out. Just if you take U.S. itself, probably 8 to 10 gigawatts will happen this year and further -- there's, in fact, a backlog of data center capacities that need to get built out. So we do continue to see that this CapEx will continue from the hyperscalers. And on the back of that, the demand for our portfolio will continue to increase.

Got it. Another question I had with respect to the sourcing of raw material, particularly the rare earth materials. If you could talk a little bit where are we in that journey? Have we got the visibility for next few years, few quarters, if you could clarify on that as well?

Yes. So I think there are 3 or 4 elements out here. One is germanium, which is used in our glass process. We have helium, which is required as part of some of our fiber manufacturing. And then we have other elements like polyethylene and others, which are linked to oil prices, et cetera. From the areas we've been speaking about, I would say, germanium, we continue to put consistent -- both on -- at the areas of sourcing, and we continue to believe that, that will improve quarter-on-quarter. At the same time, we're also looking at new technologies where our consumption of germanium itself could reduce over time. So that's something that's work in progress over the next few quarters. We'll update on that. And when it comes to helium as well, we are watching that very closely with the developments in Middle East. But we have worked on some technologies. We were able to recycle some of our requirements and from that perspective, we are well positioned. And from a polyethylene perspective, yes, the prices have been fluctuating. Largely, that ultimately is a cost for us at the cable level, and we feel fairly confident that up to a certain level that we are able to pass that on to our customers. So overall, I would say, work in progress, and we do feel confident quarter-on-quarter, it will improve.

Got it. And just the last question on the CapEx.

Sorry to interrupt Mr. [ Achen, ] we request you to join the question queue again for a follow-up question as there are other several participants. The next question is from the line -- [Operator Instructions] the next question is from the line of Devarath from Seven Rivers Holding.

Congratulations on a great set of numbers. You haven't shared the capacity utilization numbers, but I'm just curious to know that given the quantum of CapEx in AI data centers, do you think we will have the capacity to take on a couple of more large orders given the opportunity? And if not, then are we looking at any capacity additions over the next couple of quarters? That would be all from my side.

As I said, I think we're in several conversations in terms of conversations with telecom operators in India, in Europe as well as globally. At the same time, we are looking very closely at both upgrades of our equipment and machines, and we're also looking at debottlenecking from our current operations. So all of that is progressing as we would like. And both things are happening in parallel, [ Dev. ] So we are in the conversation as well as well as we feel confident that with some of the upgrades as well as debottlenecking, we can look at further orders from here.

The next question is from the line of Sunil Jain from Nirmal Bang Securities.

Congratulations on good number. My question relates to the executions which you had said will be done in the Q2. If we see last quarter, you said you will be doing something around INR 1,500 crores, but the execution has happened much larger. So similar trend can happen in the coming period also. And the execution for the whole year, if you can indicate anything on that, like you had given guidance for the margin, if anything you can indicate on the revenue?

So broadly, we don't give any guidance on the revenue. The numbers which you are talking about is the order book, which was supposed to be executed in Q1 when we talked previously. Since then, there has been drastic improvement in the order intake, which is clearly visible on the revenue growth, which you have seen. On the Q2 number, similarly, we are reporting that the executable order book is INR 2,228 crores, but that does not give any guidance on the revenue number.

Okay. And sir, second thing, if you can talk about the order pipeline, if you can indicate anything in negotiations and all?

Sunil, as I said, that we are in -- look, historically, we've always been focused on having key accounts globally, both on telecom side and data center. That's our strategy. We're not focused on the spot market, whether it is fiber or cable. We have very strong partnerships with customers in India. We have BharatNet projects and others, which are very important to us. So we continue to have very good discussions with our customers. We continue to work on our product development for their future requirements as well as particularly with telecom customers and data center customers, we are looking and in discussions for their orders and their requirements for the coming years. So that's all happening in parallel.

The next question is from the line of [ Tej Patel from Nimisha. ]

Congrats on a very great set of numbers. So a couple of questions, sir. First question on -- just wanted to understand your view on -- if I look at the gross margins, they have somewhat stayed same, right, despite our mix from DC going, let's say, up compared to the last quarter. Just wanted to get your view on this. I mean, considering, let's say, DC would be having a higher margin at the gross level, are we facing -- I mean, is it because of cost pressure at the raw material that got probably led to, let's say, same margin? Otherwise, probably would the margins have been higher? And given, let's say, we are targeting a higher proportion of share in DC to up to 30% on a yearly basis, I just wanted to get your view on gross margins moving forward as the mix towards DC shift?

So here on the gross margin, yes, there is some sort of pressure which is coming from the input cost broadly with all the war situation, the prices of the key raw material getting increased to significant multiples. We do see the improvement going forward, which will obviously be accounted in the EBITDA margins, which we are talking about.

Got it. Got it. Perfect. Sir, second question is, I mean, of course, there's been a record inflow of orders this quarter. But let's say, if I remove our long-term order of $1 billion, I mean, we have a decent order intake. Just wanted to understand, I mean, if I remove that order -- will be about, let's say, INR 3,000 crores, which was, let's say, last quarter around INR 7,000 crores to INR 8,000 crores the regular business. Was it a conscious decision on not, let's say, taking incremental business because of, let's say, capacity constraint and probably we'll start looking to take more orders, the regular orders once there's some debottlenecking, is it a conscious choice? Or was it a regular order intake?

No. So, broadly, in fact, even if we exclude this long order, there has been a sufficient order intake. Obviously, now we are in a situation wherein we have to pick and choose the orders basis the capacity availability. So that will play a role. But in this quarter, there are many much orders beyond this significant order. And going forward, we'll keep on evaluating on the basis of our capabilities to execute.

Got it. Got it. And sir, on germanium just wanted to understand, are we currently buying, I mean, whole of the inventory on spot or we have some tied up contracts, which are, let's say, at a lower fixed price?

We can't comment a lot on the germanium for competitive reasons. But we are -- as I've been sharing, we are clearly focused on looking at our sources and diversifying our sources. And we feel confident about improving our availability quarter-on-quarter.

Got it. Got it. And sir, last question on -- I mean, after this debottlenecking and you are saying that there's continuous CapEx, which is happening. Just wanted to get your view on -- are we still looking for, let's say, once we have a decent capacity on board, are we still looking for, let's say, in negotiations for a long-term order of, let's say, not of this size, but let's say, a sizable order for -- with some telcos or data centers going forward in this financial year?

I mean I can't comment on any specific size. But as I said, we are -- this is all happening in parallel. We are doing the debottlenecking and upgrades of our capabilities across glass, fiber, cable and connectivity. So all of that's happening in parallel. At the same time, we are in conversations with our current customers as well as some new customers in terms of their requirements.

Great, sir. And if you could help us with the CapEx...

Sorry to interrupt, [ Mr. Tej, ] we request you to join the question queue for your follow-up question. [Operator Instructions] The next question is from the line of Krish Mehta from Enam Holdings.

Ankit, my question was mainly -- it's more of a strategic question on how you view this entire AI versus telecom mix for the business. So given the excitement around AI and there's obvious supply crunch in the industry, right, from a more long-term capacity standpoint, how do you think of the order book kind of from filling it more towards the traditional telecom customers where maybe the margin is low initially, but it gives us more long-term stability on the book versus your AI capacity, right, in terms of your capacity and order book. If you could provide some clarity on how you're thinking about this long term?

Yes, absolutely. I think that's absolutely spot on. I would almost add one more element to that is effectively rural connectivity projects. So we have 3 or 4 parallel demand centers. One has been the historical telecom requirements, which also are continuing to grow in certain pockets and certainly in the U.S. Then you've got the data center part, which we're all aware of, and that's continuing to grow both from the hyperscalers as well as Neo clouds. And in fact, there is a middle ground between the 2 where the telecom operators or neutral fiber companies are also deploying long-haul fiber networks to ultimately serve or lease to the data centers. So they're interconnected in some way. And then you've got this third element of rural projects like BEAD, which is starting to kick off now in the U.S., which is 5- to 7-year build-out. And then you've got BharatNet in India, which is also a large 3- to 4-year build-out at least. So we are very conscious of -- we are in this business to be long term. We stated our ambitions to be top 3 in the world. And with that, we are very clear that we want to have this balance of our customer base and our portfolio base. So we're very conscious of that. What we broadly see is that our data center and enterprise segment will go towards 50% overall. And probably we will have telecom and the rural connectivity projects like Bharat and BharatNet and others as a balance.

And sorry, just a follow-up on that. So say, over the next 3 to 5 years, do you see this mix of 50% remaining constant? Or do you think that as the size kind of goes up, it will automatically adjust back down?