KR Choksey is bullish on Sterlite Technologies has recommended buy rating on the stock with a target price of Rs 127 in its research report dated December 09, 2016.
We expect the company to deliver EBIDTA growth of 29% CAGR between FY16-18E. We estimate a pre-tax RoCE of 24% and RoE of 25% by FY18E on the back of reduced interest burden and higher realizations per unit of OF and OFC. We expect company to do an EPS of INR 6.7 for FY18E, a CAGR of 32% between FY16-18E. At CMP, the stock is trading at 14.2x FY18E EPS. We give a ‘BUY’ rating on the stock, assigning a P/E multiple of 19x FY18E EPS to arrive at a price target of INR 127.
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