Sterlite Technologies - Q1FY21 Result Update - ICICI Securities

Sterlite Tech's (STL) performance in Q1FY21 was weak on the operating front as expected, which is reflective of demand slowdown/pricing pressure in product segment and Covid-19 impact. Revenues came in at Rs. 876 crore, down ~39% YoY as projects execution was significantly impacted due to lockdown, while production and delivery was hurt due to logistic challenges. EBITDA was at Rs. 122 crore, down ~62% YoY, with margins at 13.9%, down 870 bps YoY, impacted by negative operating leverage on account of revenues decline. Reported PAT came in lower at Rs. 6 crore, down 95.8% YoY, on account of weak operating performance.

Valuation & Outlook

We highlight that while long term target is attractive, the fibre pricing weakness persists. Moreover, we would await meaningful traction in demand before turning constructive. Post ~40% run up since our last update, we downgrade our rating to REDUCE (vs. HOLD, earlier). We value it at Rs. 125/share (implying 6x FY22E EV/EBITDA and 11x FY22E P/E).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_SterliteTech_Q1FY21.pdf

Shares of STERLITE TECHNOLOGIES LTD. was last trading in BSE at Rs.135.65 as compared to the previous close of Rs. 136.8. The total number of shares traded during the day was 132734 in over 2311 trades.

The stock hit an intraday high of Rs. 139.1 and intraday low of 132.8. The net turnover during the day was Rs. 18046465.

Source : Equity Bulls

Keywords