Sesa Sterlite Q2 net seen up 15% to Rs 1,658 cr: Poll

Anil Agarwal-owned Vedanta Resources subsidiary Sesa Sterlite will announce its second quarter (July-September) results on Friday. This is the first time that the merged entity will declare its numbers; hence numbers of Q2FY13 will closely be watched by the street because brokerages have a different figure for a year ago period.

Sesa Sterlite's consolidated numbers will include Cairn India, Sesa Goa and Vedanta Aluminium. Vedanta Resources merged Sterlite Industries with Sesa Goa in August and renamed latter as Sesa Sterlite.
According to a CNBC-TV18 poll, analysts on an average expect net profit of the merged entity to increase 15 percent year-on-year to Rs 1,658 crore and net sales to grow 32 percent Y-o-Y to Rs 14,600 crore in three-month period ended September 2013.
Analysts feel most of the profitability will come from its subsidiaries Hindustan Zinc and Cairn India as Sesa Sterlite owns 58.9 percent stake in latter and 65 percent stake in former while iron ore business is still a dud.
It is interesting to see whether the company will account for Cairn India’s performance for the entire September quarter or for 35 days because Cairn's stake came into its book of Sesa Sterlite for approximately 35 days of the quarter.
Analysts will also track copper and aluminum business performance for the quarter after the numbers for oil & gas business from Cairn India and zinc, lead & silver business from Hindustan Zinc already announced. Also Read - Hindustan Zinc Q2 net up 6.5% at Rs 1640 cr, margin expands
Earnings before interest, tax, depreciation and amortisation (EBITDA) may jump 68 percent on yearly basis to Rs 4,240 crore and operating profit margin may expand 620 basis points Y-o-Y to 29 percent in the quarter gone by.
Analysts expect zinc, aluminum and copper smelting EBIDTA to grow on a Q-o-Q basis due to impact of weak rupee while Cairn India and Hindustan Zinc are expected to contribute around 75 percent of the total EBITDA. Other factors
Copper smelter at Tuticorin has also restarted and is expected to contribute significantly to Q2FY14 earnings, feel analysts.
Power plant at SEL operated at around 29 percent plant load factor due to weak demand and is expected to dent power margins
Impact of rupee depreciation is a bigger benefit for the company than drag. Weak rupee results in ballooning of forex debt while there is a greater gain in EBITDA for the oil and zinc-lead-silver businesses.
 
In case of aluminum business, bauxite availability is a concern for VAL's Lanjigarh refinery.