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Sterlite Industries (India) Ltd. | Q4FY13 Result Update




IndiaNivesh Securities Pvt Ltd


30 Apr 2013





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Sterlite Industries (India) Ltd. Above street expectations Sterlite Industries reported Q4FY13 numbers above street expectations led by good performance of Zinc India, Copper, aluminium and Energy businesses. Net Sales increased by 17% YoY and 18% QoQ to Rs. 126.73 bn, above consensus of Rs. 110.49 bn due to higher volume in Zinc, copper and power business. EBITDA margin improved by 108 bps YoY and 442 bps QoQ to 26.1% due to higher top line and improvement in margin of Zinc, copper power and aluminium business. Zinc and lead EBITDA margin improved due to higher volume and better realization from lead segment. Energy business performed well on the back of higher volume and lower cost of production. In the aluminium business, both BALCO and VAL reported good set of numbers led higher sales realization due to rupee depreciation and higher metal premium. Reported PAT jumped by 50.7% YoY and 61.5% QoQ to Rs. 19.24 bn (vs. consensus of Rs. 14.82 bn) due to higher EBITDA and lower depreciation. Depreciation in Q4 was lower due to one off depreciation reversal at Zinc India. Valuation: Sterlite has created a structure of well diversified, low risk organic growth for itself by undertaking expansion activities across all base metals under its portfolio and is stepping into the commercial energy space through merchant power generation. Further, the consolidation of Sesa Goa and Sterlite will create value for all shareholders. At CMP Rs 95 the stock is trading at and 5.0x FY14E EV/EBITDA. We maintain our buy rating on the stock with SOTP based target price of Rs. 145.

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