Sterlite Industries – Under Review, NOT RATED - PINC Result Review

Sterlite's Q1FY11 consol. EBITDA grew 35% YoY to Rs15bn mainly on account of higher LME zinc price (up 36% YoY), increased copper TcRc & by-product revenue. Adj. PAT increased at a subdued 29% to Rs8.7bn due to share of ~Rs785mn in loss in associate VAL. As on June 2010, Sterlite has consolidated cash and equivalents of Rs249bn.

OUTLOOK

Sterlite Industries is uniquely placed on account of diversified asset portfolio, highly cost competitive operations, robust organic growth and strong balance sheet. We believe that commencement of 2,400MW at Sterlite Energy would provide stability to earnings.

VALUATIONS AND RECOMMENDATION

At CMP of Rs174, the stock is trading at 6.8x FY10 EV/EBITDA. The stock is currently under review. 'NOT RATED'.

Source : Equity Bulls

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