Angel Broking is bullish on Sterlite Industries (India) and has recommended accumulate rating on the stock with a target of Rs 110 in its October 26, 2012 research report.
“Sterlite Industries’s, for 2QFY2013, net sales increased 8.8% yoy to Rs11,029cr. The growth in net sales was driven by increases in aluminium, power and zinc segments’ revenues. Aluminium, power and zinc segment revenues grew 25.3%, 46.2% and 8.4% yoy to Rs859cr, Rs910cr and Rs3870cr, respectively.”
“Sterlite’s EBITDA increased by 5.0% yoy to Rs2,527cr; the EBITDA margin stood at 22.9% (higher than our estimate mainly due to better-than-expected profitability from the aluminium and power segments). The aluminium segment’s EBIT grew by 106.5% yoy to Rs43cr and the power segment EBIT grew 260.4% yoy to Rs190cr. The company reported an exceptional item relating to forex gain of Rs302cr (including that of its associate Vedanta Aluminium (VAL) compared to a forex loss of Rs276cr in 2QFY2012. Hence, the adjusted net profit increased 40.1% yoy to Rs1,441cr, which was above our estimate of Rs1,299cr.”
“We expect Sterlite to benefit from the expansion of zinc-lead smelting capacity during FY2013-14 although its aluminium segment’s profitability is expected to remain under pressure. Considering the ongoing process of group restructuring by the promoter, Vedanta Resources, the valuation of Sterlite will mirror the valuation of the consolidated company, Sesa Sterlite. On account of ban on mining in Goa, we have drastically cut Sesa Goa’s iron ore volumes for FY2013. We recommend an accumulate rating on the stock,” says Angel Broking research report. Institutional holding more than 40% in Indian cos Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. To read the full report click on the attachment
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