Hold Sterlite Technologies; target of Rs 200: ICICI Direct

ICICI Direct recommended hold rating on Sterlite Technologies with a target price of Rs 200 in its research report dated January 21, 2021.

Broker Research

January 28, 2021 / 03:01 PM IST

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ICICI Direct's research report on Sterlite Technologies

Sterlite Tech’s (STL) performance in Q3FY21 was a mixed bag as topline beat (with growth returning after 4 quarters of decline) was offset by lower than expected margins. Revenues came in at Rs 1314 crore, up 9.3% YoY. Product and services were in the ratio of 55:45. EBITDA came in at Rs 230 crore, down 4.7% YoY, owing to revenue mix. Reported EBITDA margins came in at 17.5%, down 257 bps YoY. PAT came in line at Rs 86.6, up 64.6% YoY, as Q3FY20 had one-off tax settlement. On adjusted basis, PAT was down 4% YoY.

Outlook

We upgrade to HOLD (vs. REDUCE earlier), valuing it at revised target price of Rs 200/share, largely on the back of reversal of revenue decline cycle.

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