Q3FY21 Result update - Sterlite Technologies - ICICI Direct

Sterlite Tech's (STL) performance in Q3FY21 was a mixed bag as topline beat (with growth returning after 4 quarters of decline) was offset by lower than expected margins. Revenues came in at Rs. 1314 crore, up 9.3% YoY. Product and services were in the ratio of 55:45. EBITDA came in at Rs. 230 crore, down 4.7% YoY, owing to revenue mix. Reported EBITDA margins came in at 17.5%, down 257 bps YoY. PAT came in line at Rs. 86.6, up 64.6% YoY, as Q3FY20 had one-off tax settlement. On adjusted basis, PAT was down 4% YoY.

Valuation & Outlook

The recovery in revenue growth is a key positive, however, we note that the fibre pricing weakness persists. We upgrade to HOLD (vs. REDUCE earlier), valuing it at revised target price of Rs. 200/share, largely on the back of reversal of revenue decline cycle. We would, however, await improvement in leverage (net debt was at Rs. 2158 crore as on Q2FY21) backed by cash flows generation and pricing improvement before turning constructive.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_SterliteTech_Q3FY21.pdf

Shares of STERLITE TECHNOLOGIES LTD. was last trading in BSE at Rs.193.25 as compared to the previous close of Rs. 192.25. The total number of shares traded during the day was 194911 in over 3283 trades.

The stock hit an intraday high of Rs. 198.4 and intraday low of 191.25. The net turnover during the day was Rs. 38062692.

Source : Equity Bulls

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