Sterlite Industries - Performance in line; cost pressure to be challenging ::Emkay

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Sterlite Industries

Performance in line; cost pressure to be challenging

ACCUMULATE

CMP: Rs172                                        Target Price: Rs203

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n     Q1FY12 performance in line with estimates. Topline grew by 65% YoY but fell 2% QoQ to Rs 98.6 bn. Strong LME has been the key driver for higher revenue

n     EBITDA came at Rs 27.6 bn showing a YoY growth of 84%. On QoQ however it fell by 10% on account of higher cost of production in Aluminium and power business   

n     Higher depreciation and interest costs during the quarter restricted the PAT at Rs 16.4 bn, up by 63% YoY however down by 15% QoQ

n     Despite better performance by the HZL, uncertainty remains on the other businesses coupled with rising costs. We revise our SOTP target price to Rs 203/ share; Maintain Accumulate