Sterlite has posted a turnover of Rs 20.3 bn (up 45% YoY) and a net profit of Rs 1.6 bn (up 3% YoY) for the financial year ending 30th June 1999.
Sterlite Industries (FY99 Sales Rs 11.1 bn) is into the manufacture of copper (67% of turnover) and the telecommunication cables. The company manufactures jelly filled cables (22% of turnover), optical fiber telecom cables (3%), optical fiber (2%) and aluminium (6%).
In light of the Asian crisis and a slowdown in the Indian economy, the demand for cables remained suppressed, causing a decline in price realisations. However, the company was able to post a marginal rise in bottomline. This has been achieved mainly due to higher volumes. Although there has been a fall in margins, the company is expected to better its performance in the light of a recovery in prices and demand for its products.
Sterlite operates in a market in which the Department of Telecommunications (DoT) is as yet the largest consumer. It has managed to grab a large share of the market and in the recent round of bidding it was awarded cash based orders worth Rs 20.9 bn (19% of total) from the DoT. Although dealing with the government has its own problems related to payment delays, it is nonetheless very attractive given the large volumes involved.
The demand from private sector telecom companies is likely to grow at a fast pace for the next couple of years as they increasingly invest in building up their infrastructure. This will stimulate the demand for the company's products.
The stock has been rated as a 'BUY' mainly on account of the improving demand scenario emerging after large orders, totaling 33.3 m cable km, already having been placed with cable companies.
More Views on News
Sorry! There are no related views on news for this company/sector.
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: firstname.lastname@example.org. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407