Sterlite Industries (India) Ltd - In-line performance - Emkay

Reco: ACCUMULATE
CMP: Rs 73
Target Price: Rs 88

- APAT at Rs 11.6 bn (down 18%/41% YoY/QoQ) and EBITDA at Rs 21.7 bn (down 6%/34% YoY/ QoQ) came in line. Margin rose 466 bps to 26.3% on less contribution from copper operations.

- On the segmental basis, both copper and aluminium reported losses, while zinc and power business saw QoQ EBIT margin contraction due to higher costs and regulatory issues.

- Revenue at Rs 82.5 bn, down 23% YoY and 35% QoQ was above our estimate, primarily due to higher copper (consol) and power segment revenues and higher volume at VAL.
- Our SOTP target price for Sesa Sterlite stands at Rs 147/share. Based on the merger ratio of 3:5, the corresponding value for Sterlite stands at Rs 88/share. Maintain Accumulate.

Source : Equity Bulls

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