Copper: Is the run over? - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Copper: Is the run over?

Nov 22, 2000

Both the copper majors Sterlite Industries Ltd. (SIL) and Indo Gulf Corporation Ltd. have reported strong growth in earnings. This is largely on the back of an increase in international copper prices. During the second quarter copper prices increased by $207 / metric tonne (MT) or 12%.

Sterlite reported a 68% growth in bottomline but this was also due to augmenting of its smelting capacity by 20,000 MT. Indo Gulf, meanwhile was able to report an increase in profits primarily due to the copper division. Copper now contributes almost 60% of Indo Gulf's turnover and 70% of its profits.

However, mid way into the next quarter, prices of the non-ferrous metal have begun to cool. Copper prices are down by $181 / MT or 9%, compared to the highs reached in September. Consequently, the coming quarter growth story for these respective companies may not be as sizzling.

Nevertheless, the industry continues to remain in a demand surplus position. The demand for copper in the current fiscal is expected to be 330,000 MT while the supply is expected to be 260,000 MT. This leaves a demand supply gap of 70,000 MT, which is met by imports. This gap is expected to increase in the coming years. Consequently, we may see either of the players augmenting capacity to benefit from increased volumes and prevent the entry of a new competitor.

Indo Gulf Corp. is trading at Rs 35.4 on a multiple of 3.4 on 2QFY01 annualised earnings. Whereas, Sterlite is quoted at Rs 151 and is trading on a multiple of 2.8 on 1QFY01 annualised earnings.


Equitymaster requests your view! Post a comment on "Copper: Is the run over? ". Click here!

  

More Views on News

AVANTI FEEDS Announces Quarterly Results (1QFY21); Net Profit Up 14.1% (Quarterly Result Update)

Aug 28, 2020 | Updated on Aug 28, 2020

For the quarter ended June 2020, AVANTI FEEDS has posted a net profit of Rs 1 bn (up 14.1% YoY). Sales on the other hand came in at Rs 10 bn (down 12.6% YoY). Read on for a complete analysis of AVANTI FEEDS's quarterly results.

RELAXO FOOTWEARS Announces Quarterly Results (1QFY21); Net Profit Down 51.3% (Quarterly Result Update)

Aug 24, 2020 | Updated on Aug 24, 2020

For the quarter ended June 2020, RELAXO FOOTWEARS has posted a net profit of Rs 242 m (down 51.3% YoY). Sales on the other hand came in at Rs 4 bn (down 43.9% YoY). Read on for a complete analysis of RELAXO FOOTWEARS's quarterly results.

FORTIS HEALTHCARE 2018-19 Annual Report Analysis (Annual Result Update)

Oct 18, 2019 | Updated on Oct 18, 2019

Here's an analysis of the annual report of FORTIS HEALTHCARE for 2018-19. It includes a full income statement, balance sheet and cash flow analysis of FORTIS HEALTHCARE. Also includes updates on the valuation of FORTIS HEALTHCARE.

THOMAS COOK INDIA 2018-19 Annual Report Analysis (Annual Result Update)

Oct 18, 2019 | Updated on Oct 18, 2019

Here's an analysis of the annual report of THOMAS COOK INDIA for 2018-19. It includes a full income statement, balance sheet and cash flow analysis of THOMAS COOK INDIA. Also includes updates on the valuation of THOMAS COOK INDIA.

MSTC IPO: Should You Bet on This State-Run E-Commerce Player? (IPO)

Mar 13, 2019

Should you subscribe to the IPO of MSPC Limited?

More Views on News

Most Popular

Why We Picked This Small-cap Stock for Our Hidden Treasure Subscribers (Profit Hunter)

Sep 17, 2020

This leading household brand will profit big time in a post covid world.

My Top Stock to Buy in this Market Selloff (Profit Hunter)

Sep 22, 2020

The recent correction offers a great opportunity to buy this high conviction smallcap stock.

Can the Nifty Fall to 10,200? (Fast Profits Daily)

Sep 24, 2020

The Nifty has reached an important support level today. If it breaks then we could see further downside.

What Do the Charts Say About Buying Smallcaps Now? (Fast Profits Daily)

Sep 18, 2020

Everyone seems to be excited about buying smallcaps now...but is it the right thing to do? What do the charts tell us? Find out in this video...

More

Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms

COMPARE COMPANY

MARKET STATS