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Sterlite Industries
RECO : Accumulate TP : Rs 205
Investment Rationale
§ Most of the negative news flows are priced in; possibility of getting alternative sourcing of bauxite for Balco and
VAL
§ Robust performance by Hindustan Zinc, major contributor to the bottomline with ramp up in productions and
incremental jump in silver production
§ Stabilization of 2x600 MW IPP and starting of commercial production along with commissioning of another 2x600
MW IPP by Q4FY12
§ Sharp rise in base metals prices on LME
Valuations
§ At the CMP of Rs 173, the stock is trading at 8.5xFY12E EPS and 5.5x FY12E EV/ EBITDA
§ We value the stock on SOTP basis to arrive at a target price of Rs 205/ share in which contribution of Hindustan
Zinc remains at Rs 110/ share
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Sterlite Industries
RECO : Accumulate TP : Rs 205
Investment Rationale
§ Most of the negative news flows are priced in; possibility of getting alternative sourcing of bauxite for Balco and
VAL
§ Robust performance by Hindustan Zinc, major contributor to the bottomline with ramp up in productions and
incremental jump in silver production
§ Stabilization of 2x600 MW IPP and starting of commercial production along with commissioning of another 2x600
MW IPP by Q4FY12
§ Sharp rise in base metals prices on LME
Valuations
§ At the CMP of Rs 173, the stock is trading at 8.5xFY12E EPS and 5.5x FY12E EV/ EBITDA
§ We value the stock on SOTP basis to arrive at a target price of Rs 205/ share in which contribution of Hindustan
Zinc remains at Rs 110/ share
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