Deutsche Bank maintains Buy rating on Sterlite Industries

Deutsche Bank has come out with a research report on Sterlite Industries Ltd on media reports suggesting the Government might put the residual stake sale of Hindustan Zinc and Balco on fast track.

Deutsche Bank's analysis indicates that the residual stake buyouts will be earnings accretive in the range of 7-13% for Sterlite Industries.

Deutsche Bank feels that Sterlite's fair valuation will be positively affected by 2.6% if the January 2012 offer is executed. If the bid prices are increased for Hindustan Zinc (+20%) and Balco (+70%), then Sterlite's fair valuation would be negatively affected by 8.7% without factoring any re-rating on improved cash fungibility.

We maintain our Buy Rating.

Source : Equity Bulls

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