Sterlite Industries Q2 misses street;Citi cuts target price

Vedanta group company Sterlite Industries has posted a net profit of Rs 998 crore in the second quarter of FY12, a fall of 1% as compared to Rs 1,008 crore in the corresponding quarter of last fiscal. This was way below expectations because of forex loss; CNBC-TV18 poll saw net profit at Rs 1,445 crore.

Forex loss for the July-September quarter stood at Rs 466.2 crore and Interest & finance charge was at Rs 356 crore.

Net sales jumped 68% to Rs 10,134 crore from Rs 6,029 crore year-on-year. During the same period, the company's EBITDA margin came in at 23.9% as against 24.4%.
 
Sterlite Industries' board members approved merger of Sterlite Opportunities & Ventures with company.

Recommendations

Citi has a BUY on Sterlite . It has lowered the target price to Rs 165 to incorporate Hindustan Zinc's recently revised target of Rs 112. Growth in the bottomline was driven by higher zinc-lead LME prices and higher copper volumes.

The share touched an intraday high of Rs 119.40 and an intraday low of Rs 117.50. At 12:22 hrs the share was quoting at Rs 118.85, up Rs 2.90, or 2.50%.
 
It was trading with volumes of 455,242 shares. In the previous trading session, the share closed up 0.74% or Rs 0.85 at Rs 115.95.