Sterlite Power Transmission Limited
Unlisted Share

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Sterlite Power Transmission Limited

Overview

The corporate headquarters of Sterlite Power Transmission Limited are in Delhi, where it was established on May 5, 2015. It is one of the top developers and suppliers of integrated power transmission solutions worldwide. As of March 31, 2021, the firm employed 715 people in India, 68 people in Brazil, and 912 contract or temporary workers. In India’s gearbox industry, Sterlite Power has led the way in terms of innovation and technological advancement. Within the legacy-driven power transmission industry, they have paved the path for the adoption of the most recent best practises worldwide. They are in the front when it comes to developing, producing, and implementing newer, more effective technologies that enhance their capacity to offer customised solutions for clients’ demands. Serentica is a business that facilitates heavy lifting and offers a complete energy solution.

Sterlite Power Investment Thesis

Company Overview:

With more than 13,700 circuit km and 26,100 MVA of projects under development in Brazil and India, Sterlite Power is a prominent global developer of power transmission infrastructure. Additionally, Sterlite Power provides solutions for strengthening, updating, and modernising current networks with its industry-leading array of OPGW, EHV cables, and power conductors.

With its creative financing and state-of-the-art technology, the firm has redefined industry standards. In addition, IndiGrid, the country’s first Infrastructure Investment Trust (InvIT) for the electricity industry that is listed on the BSE and NSE, is sponsored by Sterlite electricity.

Resolving issues at the nexus of time, space, and money, it is a preeminent worldwide power transmission innovator and solutions supplier. Sterlite Power is concentrating its approach in this dynamic environment on tackling difficult problems in the

Growth Story:

  • The three Inter-State Transmission System (ISTS) projects, Western Region Strengthening Scheme – XIX (WRSS-XIX), North Eastern Region Strengthening Scheme – IX (NERSS-IX), and Western Region Strengthening Scheme – XXI (WRSS-XXI), valued at around 3,600 crores, or US$488 million, have been added to our portfolio.
  • 3 million safe person hours were completed at MSI projects between April 2019 and March 2020 without any incidents.
  • pioneers in robotic technology for OPGW stringing with SkyRob and live-line reconductoring technology in India.
  • Using Aluminium Conductor Composite Core – Ultra Low Sag (ACCC ULS) Ganga innovation and design, long-span river bridges may be transformed.
  • We completed our first project in Brazil, Arcoverde, successfully and 28 months ahead of time.
  • The LIDAR survey on the GTTPL project’s Raigarh-Tamnar line was successfully begun.
  • awarded in the Gold category for “Safety in Electricity” at the 2019 Protection Brazil Awards
  • recognised as the 2021 Earth & Environment Foundation (EEF) Global Sustainability Award “Gold winner” in recognition of exceptional accomplishments in sustainability management.
  • Three Brazilian assets—Arcoverde, Novo Estado, and Pampa—were successfully sold.
  • won the NER project’s IPMA Project Excellence Award in 2021.
  • declared the victor of the Sterlite EdIndia Campaign’s CSR Initiative of the Year category at the Asian Power Awards in 2021.

Mission & Vision

Our mission is to make sure that all we do is in line with our core values of innovation, respect, social impact, and fun, as well as our fundamental purpose of “Empowering Humanity by Addressing the Toughest Challenges of Energy Delivery.”

Business Segments:

1. Global Infrastructure:

The year 2020 was indeed a challenging time due to the COVID-19 pandemic, and it had a significant impact on various sectors, including the infrastructure industry, and more specifically, the Power Transmission segment. Your description highlights the resilience and determination of your team to overcome operational and logistical challenges during this unprecedented period.

The successful execution of the North East Region System Strengthening Scheme-II (NERSS) project, also known as NER-II, is a noteworthy accomplishment. This project’s significance in delivering over 3,000 MW of power to the north east region of India cannot be understated. It not only strengthens the grid infrastructure but also ensures reliable power access for a substantial population in the region, benefiting approximately 5.3 crore people.

The geographical scope of the project, spanning Assam, Arunachal Pradesh, and Tripura, along with its 11 different elements, including substations and transmission lines, showcases the complexity and scale of NER-II.

Additionally, the project’s role in facilitating clean energy sources, such as hydro and gas-based power, is commendable. Connecting these energy sources to the national grid and using gas as a natural balancer for renewables is vital in addressing the intermittency of renewable energy generation.

Your company, Sterlite Power, seems to be a key player in the power transmission industry, involved in bidding, designing, constructing, owning, and operating transmission assets in both India and Brazil. With a diverse portfolio of 28 projects covering close to 13,700 circuit kilometers of transmission lines, your company is making a substantial contribution to improving energy infrastructure and expanding access to reliable power in different regions.

In summary, your accomplishments in the Power Transmission segment, particularly the NER-II project, reflect your commitment to delivering essential infrastructure even in the face of unprecedented challenges, ultimately benefiting millions of people and contributing to the integration of clean energy sources into the grid.

MSI and Products Business:

It appears that you’re describing a company or organization involved in the energy and infrastructure sector in India. The text highlights several key points about the organization:
  • Urbanization and Development Challenges: The organization recognizes the rapid urbanization and development in India, which is leading to a surge in power demand and, consequently, transmission congestion challenges.
  • Transmission Infrastructure Solutions: The organization emphasizes the need to enhance and upgrade aging transmission infrastructure to address these challenges. They aim to do this through innovative and cost-effective solutions.
  • Expertise and Technology: The organization claims to have top-notch technological prowess, engineering expertise, and specialized services for the energy and infrastructure sector.
  • OPGW Manufacturing: They state that they are India’s first and largest integrated manufacturers of Optical Ground Wire (OPGW), which is a type of cable used in the transmission of data on high-voltage transmission lines.
  • Commitment to Customers: The organization underscores its long-standing commitment to its customers, focusing on creative problem-solving, strategic investments, and research and development to meet customer needs.<
  • Efficiency and Innovation: The organization is committed to refining its operations and delivering top-notch customer service. They mention their efforts to innovate across various areas to shape the future of energy and address customer challenges efficiently.
  • Multi-Service Offering: Their Multi-Service Integration (MSI) business seems to offer a comprehensive range of services, including increasing throughput, upgrading existing infrastructure, and improving overhead conductors and communication systems using OPGW technology.
This text conveys a commitment to addressing India’s growing energy and infrastructure needs through innovative and customer-focused solutions. It appears that the organization is dedicated to staying at the forefront of technological advancements and industry standards to serve its customers effectively.

Convergence:

In light of the impending arrival of 5G technology and the readiness of IoT devices for Machine to Machine (M2M) communication, dependable optical fibre infrastructure is important. The ubiquitous utility network spread over the whole nation is well-positioned to meet the aforementioned demand. In addition to offering unmatched coverage, a fibre network that utilises utilities’ current infrastructure may also be reliable and secure. Our Convergence division, which makes use of the incredibly dependable OPGW network, is one of the nation’s top providers of best-in-class dark fibre solutions.
The company is seeking to reproduce the comparable PPP models in other states and is now in expansion mode. With our co-location services, you may rent a customizable rack space in a highly secure area with numerous backup power sources and an uninterrupted power supply. Leasing the vast network of transmission towers for IoT and telecommunication services is one of the tower infrastructure services. Additionally, the company does end-to-end fibre EPC to assist telecom service providers in building their networks. Our introduction of edge computing containerized data centres (CDC) for hosting telecom equipment makes us the pioneers in the Indian telecom sector. The CDC solution offers a better client experience while cutting down on turnaround time. At the 12th Aegis Graham Bell Awards, Sterlite Power’s CDC solution was acknowledged for winning

Competitive Strength:

1. Areal Technology for project execution:

  • Unmanned aerial vehicles (UAVs) provide automated inspection services and planning.
  • Helicopter stringing was first used in India.
  • Tower construction with helicranes in difficult terrain.
  • a backer of the international IT startup SharperShape.

2. Big Data Algorithm/Simulative Adaption

  • Using the in-house smart algorithm platform TransAnalyst, optimise resources, design routes, and create elevation models.
  • enhancing soil features’ predictability for foundation design by using data analytics (Subsurface Terrain Model, or STeM).
  • India-wide research in power systems.
  • Tower test simulations to verify designs.

3. Robotics for safe stringing and technology products:

  • optical ground wire stringing by robots that is secure and effective.
  • largest producer of conductors with outstanding performance in India.
  • fiber-integrated power cable with low loss and high capacity.
  • largest player in India for OPGW.
  • Modular power flow control solutions offered by SmartValveTM

4. Smart Project for Modern Grid:

  • The first vertical GIS substation in India has a lower footprint and emits less CO2.
  • Reconductoring a 66 kV transmission line in “Live-Line Condition” will double Bengaluru’s Electronic City’s capability for power transfer.

5. Technology for Greener Ecosystem:

  • Relocating larger, more established live trees.
  • Convergence’s green colocation.

Peer Comparison:

Financials:

Source: Company Filing Form AOC-4
Source: Company Filing Form AOC-4

Valuations:

In FY’22, the company’s operating cash flow grew and turned positive at INR 428 Cr. Given that the company’s operating cash flow has been negative for the last two years, this is a significant boost for the business. The company’s sale of its other assets and an approximate INR 300 Cr rise in contract obligations for EPC contracts, including customer advances, are to blame for this increase. We thus have a positive operating cash flow.
Since the loss for the year was included in the other equity, the company’s total debt to equity ratio has been positive, whereas it was negative for the years before to 2021. The corporation has drastically cut its overall debt, and bank loans have decreased, totaling about INR 1200 Cr from financial institutions. Furthermore, in 2020, the firm obtained an advance from Sterlite Interlinks Ltd. for around INR 620 Cr. This was paid off in 2021, and as of 2022, the company had no outstanding debt from interlinks. Even with the company’s debt reduction, the debt-to-equity ratio remains extremely high.
The company’s current ratio increased by 0.3% in FY’22 compared to FY’21. The company’s current assets have dropped by around 5% as a result of lower bank balances and inventories in FY’22 compared to FY’21. Conversely, the current liabilities have dropped by 32% in FY’22 compared to FY’21. As a result, the current ratio has increased.
In FY’22, the company’s interest coverage ratio rose. This is because the company’s total debt dropped in FY’22, which reduced the company’s financing costs by about INR 200 Cr, increasing the company’s interest coverage. The company’s good ROE in FY’22 may be attributed to its positive equity balance in both the current and prior fiscal years.
The company’s return on assets (ROA) increased in FY’22 compared to FY’21. Due to a drop in operating revenue, which forced the firm to dispose its assets, the company’s net income fell by 14% in FY’22 compared to FY’21. Due to the sale of its transmission line assets, which were valued at INR 400 Cr, the company’s total assets fell by 34% in FY’22 compared to FY’21.

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