ICICI Direct is bullish on Sterlite Technologies has recommended buy rating on the stock with a target price of Rs 450 in its research report dated July 11, 2018.
ICICI Direct's research report on Sterlite Technologies
Sterlite Technologies (Sterlite) has announced the signing of definitive agreements for acquisition of a European specialised optical fibre cable manufacturer Metallurgica Bresciana S.p.A (Metallurgica) in all cash deal for the total consideration of Euro 47 mn (| 367 crore), to be funded by the mix of internal accruals and European debt instruments.
The recent acquisition also seems to be “steal deal” and is likely to boost the management overall vision of achieving ~US$ 100 mn PAT by FY20. Given the robust growth potential (topline and earnings CAGR of 35.4% and 34.1%, respectively, in FY18-20E), we maintain our BUY recommendation on the stock. We value the company at 30x FY20E P/E to arrive at target price of | 450.
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