Sterlite Industries: Is it a good contrarian bet?

A day after Sterlite Industries reported a 22 percent decline in its Q1 numbers, the stock is down about 3 percent. Two brokerages- CLSA and JP Morgan have given their contrarian calls on the stock:

Bullish view

One of the most bullish views on the street is from JPMorgan. The have an overweight on the stock with a target price of Rs 145 odd, so that is nearly 50 percent up from the current prices.
The brokerage believes that the Madras High Court approval was a step in the right direction. The power business without the forex losses was an earnings before interest, taxes, depreciation and amortization (EBITDA) beat.
The Plant Load Factors (PLF) in the power business are likely to go up to nearly around 60 percent versus the 50 percent right now and also they do believe that the Indian zinc business which is effectively Hindustan Zinc would improve continuing going ahead. So, clearly they do have a positive stance on the stock at least as of now. Bearish view
CLSA has a sell rating on Sterlite Industries with a target price Rs 75. This means that even after Sterlite has lost 30 percent so far this year, it still sees close to about a 67 percent downside in the stock.
The key reasons for the selling the stock are that their Q1 margins as well as profits were lower than CLSA estimates. In fact, Earnings Before Interest and Taxes (EBIT) margins have declined in all the divisions with the copper and aluminium divisions reporting EBIT level losses.
The bigger concern is that going forward as well the brokerage expects challenges in the aluminium, iron and power business. So, they are saying the woes in these three key spaces are not showing any kind of respite. They are suffering on account of regulatory issues as well as resource availability constraints. So, even going forward the outlook looks a bit murky according to CLSA.