Accumulate Sterlite Industries - Emkay

Sterlite Industries
Reco: ACCUMULATE
CMP: Rs 108
Target Price: Rs 134

Overall steady performance – albeit aluminium

- The adjusted PAT at Rs 9.2 bn was down 17% on YoY basis and 11% on QoQ basis on account of steady increase in effective tax rate from 19.7% in Q3FY11 to 23.4% in Q3FY12

- EBITDA at Rs 23.2 bn up 7% YoY basis however down 6.6% QoQ. The margins at 22.5% were down 125 bps YoY basis essentially because of higher (300 bps) energy costs

- Revenue at Rs 103 bn was up 24% YoY due to better metal sales (up ~7%) and power sales (up 185%). Sharp QoQ drop in LME prices (12% - 17%) was offset by the weak rupee (11%)

- With revised LME and exchange rate, the FY12 and FY13 EPS stand at Rs 14.7 (-9%) and Rs 17.6 (-11%) respectively. Our SOTP target price now at Rs 134/ share; Maintain Accumulate.

Source : Equity Bulls

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