Sesa Sterlite - 2QFY14 volumes on expected lines - Kotak

Sesa Sterlite's reported 2QFY14 production volumes were in line with our estimates in the zinc-lead segment (+14% qoq) and weak in the power segment (-40% qoq). As expected, the management lowered mined metal guidance for Zinc India by 5% to 950 kt after volumes of 460 kt in 1HFY14-still healthy 9% yoy growth. The power business disappointed with SEL's 31% PLF due to weak demand and requires closer scrutiny. Volume growth in Sesa in FY2014E will be limited to Zinc India and the power segment.

After the recent run-up in the stock price, upside will be modest from hereon. We maintain our ADD rating.

Source : Equity Bulls

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