X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Sterlite Ind: Quick reversal - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Jan 30, 2002

    Sterlite Ind: Quick reversal

    Sterlite Industries Ltd. has been able to stem the slide in sales experienced in the first quarter. For the quarter ended December '01, sales have registered a buoyant rise. Improved volume sales have supported YoY growth while realisation are likely to have ruled lower.

    (Rs m) 2QFY01 2QFY02 Change 1HFY01 1HFY02 Change
    Net Sales 7,357 8,426 14.5% 15,003 15,612 4.1%
    Other Income 109 35 -68.1% 143 70 -50.7%
    Expenditure 6,533 7,413 13.5% 13,289 13,727 3.3%
    Operating Profit (EBDIT) 824 1,013 23.0% 1,714 1,885 10.0%
    Operating Profit Margin (%) 11.2% 12.0%   11.4% 12.1%  
    Interest 295 360 21.9% 619 710 14.8%
    Depreciation 220 224 1.9% 441 451 2.3%
    Profit before Tax 417 464 11.2% 797 795 -0.3%
    Tax 41 101 146.6% 66 84 27.0%
    Profit after Tax/(Loss) 376 363 -3.5% 731 711 -2.8%
    Net profit margin (%) 5.1% 4.3%   4.9% 4.6%  
    No. of Shares (eoy) 53.9 55.6   53.9 55.6  
    Diluted Earnings per share 27.1 26.1   26.3 25.6  
    P/E Ratio   4.7     4.8  

    On the London Metal Exchange (LME), copper prices for the December quarter averaged $1,421.1, which was 21.6% lower compared to the corresponding quarter of the previous year. Copper, on the LME, experienced a similar trend in the September quarter. With lower realisations and marginal growth in volumes sales, growth in the first quarter could not be salvage. However, in 2QFY02, the company has reported a healthy 27% growth in volumes, which is supported mainly by better domestic copper sales. Export volumes are likely to have increased but lower realisations in the export market has led to a decline in export sales. China is the wild card, as the country pushes ahead on infrastructure (telecom & housing), the fresh demand seems to be supporting global demand & supply of the base metal.

    The higher copper sales, through improved demand, has been possible with the company undertaking de-bottlenecking at its copper smelter last fiscal. The de-bottlenecking, expanding capacity by 50,000 tonnes per annum (TPA), is likely to have been completed towards mid-2001. Reportedly, the smelter with augmented capacity is operating above rated capacity. The power transmission line aluminium conductor business continues to perform well, registering a 61% YoY growth. This does indicate, contrary to popular perception, activity in the power sector, especially in replacing or developing new grid lines.

    Similar to the preceding quarter the company has managed to lift operating margins. OPM has increased by 80 and 70 basis points for the quarter and half year ended December '01. Despite difficult operating conditions in 1QFY02, with lower realisations and poor volumes, the company managed to protect margins, which does reflect well on the company. Commodities, as Indian houses are realising, is a cost game and controlling the same is the only likely way to sustain competitive advantage. The improved sales and higher margins has enabled impressive growth in operating profits.

    Both, Sterlite Industries and Indo Gulf Industries have augmented smelter capacity to 150,000 TPA each through de-bottlenecking. Domestic production will eat into imports, which are likely to fall significantly. Backed by higher volume sales, Sterlite Industries could continue with its improved sales performance into 3Q & 4Q, benefiting from the de-bottlenecking effect. Also, copper prices have risen from the lows, post September 11, and are trading near $1,500 / tonne on the LME. This is likely to be the price level for fiscal '02. Having said that, intensity of development effort by China could guide copper prices going ahead.

    At Rs 123, the scrip trades on a multiple of 4.8x 1HFY02 annualised earnings. The scrip tends to trade in a P/E band of 3x-6x earnings.

     

     

    Equitymaster requests your view! Post a comment on "Sterlite Ind: Quick reversal". Click here!

    1 Responses to "Sterlite Ind: Quick reversal"

    Vandana

    Jul 19, 2011

    Pl. send your future plan to your viewers on net.

    Like 
      
    Equitymaster requests your view! Post a comment on "Sterlite Ind: Quick reversal". Click here!
     

    More Views on News

    Securities & Intelligence Services Ltd. (IPO)

    Jul 31, 2017

    Should you subscribe to the IPO of Securities & Intelligence Services Ltd?

    Why Super Investors are Underperforming in This Market (The 5 Minute Wrapup)

    Jul 8, 2017

    If Super Investors can wait for the right pitch, so can you.

    Tejas Networks Ltd. (IPO)

    Jun 14, 2017

    Should you subscribe to the IPO of Tejas Networks Ltd?

    Discover the Secrets of Hidden Smallcaps From These AGMs (The 5 Minute Wrapup)

    May 26, 2017

    Don't be surprised to come across some Super Investors there!

    A Trader's Nightmare. A Business Owner's Delight. (The 5 Minute Wrapup)

    May 19, 2017

    Not all small-cap investors see themselves as traders. Some see themselves as business owners.

    More Views on News

    Most Popular

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    The Most Important Innovation in Finance Since Gold Coins(Vivek Kaul's Diary)

    Aug 10, 2017

    Bill connects the dots...between money and growth, real money and real resources, gold and cryptocurrencies...and between gold, cryptocurrencies, and time.

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    STERLITE IND. SHARE PRICE


    Aug 26, 2013 (Close)

    TRACK STERLITE IND.

    • Track your investment in STERLITE IND. with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks

    STERLITE IND. 5-YR ANALYSIS

    Detailed Financial Information With Charts

    COMPARE STERLITE IND. WITH

    MARKET STATS