Sterlite, 1Q FY 2014

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Please refer to important disclosures at the end of this report 1

Quarterly highlights (Consolidated)Particulars (` cr) 1QFY14 1QFY13 % chg (yoy) 4QFY13 % chg (qoq)Net sales 8,190 10,591 (22.7) 12,609 (35.0)EBITDA 2,173 2,308 (5.9) 3,307 (34.3)

% margin 26.5 21.8 473bp 26.2 30bp

Adjusted PAT 1,164 1,419 (18.0) 1,964 (40.8)Source: Company, Angel Research

Sterlite Industries (Sterlite) reported lower-than-expected 1QFY2014 results. Both,

the top-line as well as net profit were lower than our expectations, mainly due to

lower-than-expected performance from the Copper segment.We recommend Buy

rating on the stock.Top-line declines due to Copper segment: The companys net sales declined22.7% yoy to `8,190cr (below our estimate of `8,372cr). The decline in net sales

was mainly in the Copper segment due to temporary shutdown of the Tuticorin

copper smelter in this quarter. However, the same was partially offset by higher

revenues from the Power segment due to higher power sales from the Jharsuguda

power plant. Copper segment revenues declined 52.3% yoy to `2,446cr

Copper and Aluminium segments reported EBIT loss: On the operating front,Sterlites EBITDA declined 5.9% yoy to `2,173cr and the EBITDA margin stood at

26.5% (below our estimate of 28.6%) mainly due to a loss of `51cr and `26cr in

the Copper and Aluminium segment respectively.

Higher interest costs and taxes dent PAT: The companys interest costs increasedby 49.6% yoy to `362cr due to non-capitalization of interest on the Jharsuguda

plant and the tax rate was also higher at 16.8% compared to 14.7% in

1QFY2013; hence the adjusted net profit decreased by 18.0% yoy to `1,164cr,

which was below our estimate of `1,198cr.

Outlook and valuation: We expect Sterlite to benefit from the expansion ofZinc-Lead smelting capacity during FY2014-15 although its Aluminium segments

profitability is expected to remain under pressure. Considering the ongoing process

of group restructuring by the promoter, Vedanta Resources, the valuation of Sterlite

will mirror the valuation of the consolidated company - Sesa Sterlite.We recommend

a Buy rating on the stock.Key financials (Consolidated)Y/E March ( ` cr) FY2012 FY2013 FY2014E FY2015ENet sales 41,179 45,162 44,493 45,599% chg 35.3 9.7 (1.5) 2.5

Net profit 4,828 6,060 5,661 6,463% chg (4.3) 25.5 (6.6) 14.2

FDEPS (`) 15.5 18.3 16.8 19.2OPM (%) 24.0 23.2 22.4 23.9

P/E(x) 5.0 4.2 4.6 4.0

P/BV(x) 0.6 0.5 0.5 0.4

RoE(%) 11.0 12.5 10.5 10.9RoCE(%) 11.3 10.2 8.1 8.2

EV/Sales (x) 0.5 0.5 0.4 0.4

EV/EBITDA (x) 2.2 2.0 1.9 1.5

Source: Company, Angel Research: Note: CMP as of July 26, 2013

BUYCMP `77

Target Price `97

Investment Period 12 months

Stock Info

Sector

Net Debt (`cr) 1,410

Bloomberg Code

Shareholding Pattern (%)

Promoters 53.3

MF / Banks / Indian Fls 9.1

FII / NRIs / OCBs 27.9

Indian Public / Others 9.7

Abs. (%) 3m 1yr 3yr

Sensex 1.8 17.2 9.6

STLT (15.2) (23.7) (56.0)

52 Week High / Low 123/74

Base Metals

Market Cap (` cr) 25,743

Beta 1.5

Avg. Daily Volume 506,027

Face Value (`) 1

BSE Sensex 19,748

Nifty 5,886

Reuters Code STRL.BO

STLT@IN

Bhavesh ChauhanTel: 022- 39357600 Ext: 6821

[email protected]

Vinay RachhTel: 022- 39357600 Ext: 6841

[email protected]

Sterlite IndustriesPerformance Highlights

1QFY2014 Result Update | Base Metals

July 27, 2013

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Sterlite Industries | 1QFY2014 Result Update

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Exhibit 1:1QFY2014 Performance (Consolidated)

Y/E March (` cr) 1QFY14 1QFY13 % chg yoy 4QFY13 % chg qoq FY2013 FY2012 % chg yoyNet Sales 8,190 10,591 (22.7) 12,609 (35.0) 44,922 40,967 9.7- Consumption of Raw Material 2,369 5,040 (53.0) 5,772 (59.0) 20,883 18,832 10.9

(% of Net Sales) 28.9 47.6 45.8 46.5 46.0

- Power& Fuel 1,221 1,115 9.5 1,081 13.0 4,420 4,040 9.4

(% of Net Sales) 14.9 10.5 8.6 9.8 9.9

- Staff Costs 482 450 7.0 503 (4.3) 1,880 1,612 16.6

(% of Net Sales) 5.9 4.3 4.0 4.2 3.9

- Other expenses 2,004 1,735 15.5 2,010 (0.3) 7,454 6,819 9.3

(% of Net Sales) 24.5 16.4 15.9 16.6 16.6

Total Expenditure 6,077 8,340 (27.1) 9,367 (35.1) 34,637 31,304 10.6(% of Net Sales) 74.2 78.7 74.3 77.1 76.4

Other operating Income 59 57 3.6 65 (8.4) 240 212 13.4

EBITDA 2,173 2,308 (5.9) 3,307 (34.3) 10,469 9,863 6.1EBITDA margin (%) 26.5 21.8 26.2 23.3 24.1

Interest 362 242 49.6 276 31.2 922 852 8.2

Depreciation 526 518 1.4 453 15.9 2,032 1,830 11.0

Other Income 1,066 948 12.4 798 33.6 3,453 3,163 9.2

Exceptional Items (230) (217) (40) (101) (473) (78.7)

Profit before Tax 2,122 2,279 (6.9) 3,454 (38.6) 10,867 9,872 10.1(% of Net Sales) 25.9 21.5 27.4 24.2 24.1

Tax 357 334 6.8 418 (14.7) 1,618 2,111 (23.3)

(% of PBT) 16.8 14.7 12.1 14.9 21.4

Minority Interest 571 577 (1.0) 787.2 2,529 2,161 17.0

Share of profit/(loss) in associate (260) (167) (206.4) (660) (772) (14.6)

Reported PAT 934 1,202 (22.3) 1,925 (51.5) 6,060 4,828 25.5Net income margin (%) 11.4 11.3 15.3 13.5 11.8

FDEPS 0.0 3.6 (100.0) 5.7 (100.0) 18.3 15.5 18.2Adj. net profit 1,164 1,419 (18.0) 1,964 (40.8) 6,146 5,200 18.2

Source: Company, Angel Research

Exhibit 2:1QFY2014 Actual vs Angel estimates

(` cr) Actual Estimates Variation (%)Net sales 8,190 8,372 (2.2)

EBITDA 2,173 2,394 (9.3)

EBITDA margin (%) 26.5 28.6 (207)bp

Adj. net profit 1,164 1,198 (2.9)


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1QFY2014 result highlightsSterlite reported lower-than-expected 1QFY2014 results. Both, the top-line as well

as net profit were lower than our expectations mainly due to a lower-than-expected

performance from the Copper segment. The companys net sales declined 22.7%

yoy to `8,190cr (below our estimate of `8,372cr). The decline in net sales was

mainly in the Copper segment due to temporary shutdown of the Tuticorin

copper smelter in this quarter. However, the same was partially offset by

higher revenues from the Power segment due to higher power sales from the

Jharsuguda power plant. Copper segment revenues declined 52.3% yoy to

`2,446cr. On the operating front, Sterlites EBITDA declined 5.9% yoy to

`2,173cr while the EBITDA margin stood at 26.5% (below our estimate of

28.6%) mainly due to EBIT loss of `51cr and `26cr in the Copper and

Aluminium segments respectively. Hence, the adjusted net profit decreased by

18.0% yoy to`

1,164cr, which was below our estimate of`

1,198cr.Segmental performanceCopper segment reports loss due to plant shutdownDuring 1QFY2014, copper cathode production at the Tuticorin smelter declined by

82.0% yoy to 16k tonne due to temporary closure of the smelter following an order

of TNPCB over the alleged gas leaks. Metal mined from the Australian mines also

decreased by 13.0% yoy to 6k tonne. Copper segment revenues declined by

52.3% yoy to `2,446cr during the quarter.

Copper Tc/Rcs increased by 12.0% yoy to USc13.9/lb. The Copper segmentreported a PAT loss of `190cr in 1QFY2014, mainly due to higher fixed expenses

at the Tuticorin plant and lower production.

Exhibit 3:Copper segment reports an EBIT loss of`51cr


Aluminium segment reports an EBIT loss of`26cr

During the quarter, Balcos Aluminium production was flat at 61kt and its revenue

decreased by 5.0% yoy to `745cr mainly on account of lower sales volume and fall

in metal prices. However this impact was partially offset by the depreciation of the

Indian Rupee. The cost of production of Aluminium at Balco increased by 5.0% yoy

158

194

298291

309326

273

201

277

160

334

(51)

(3.0)

(2.0)

(1.0)

0.0

1.02.0

3.0

4.0

5.0

6.0

7.0

8.0

(100)

(50)

0

50

100

150

200

250

300

350

400

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

1QFY14

(%)

(`cr)

EBIT (LHS) EBIT margins (RHS)

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to `1,08,233/tonne on account of further tapering off of coal linkage as per the

Coal Block policy and higher operating cost of captive power plant due to

maintenance shutdown of one of the units of 540MW. As a result, the Aluminium

segment reported an EBIT loss of`

26cr in 1QFY2014 compared to a positive EBITof `4cr in 1QFY2013.

Sterlites associate, Vedanta Aluminium reported a loss of `881cr in 1QFY2014

(Sterlites share of loss `260cr) compared to a loss of `565cr in 1QFY2013. The

higher loss in 1QFY2014 was primarily on account of higher interest cost. Interest

cost was higher due to cessation of interest capitalization pertaining to the

Jharsuguda-II smelter on account of delay in its commissioning.

Exhibit 4:Aluminium segments reported EBIT loss of`26cr


Zinc-Lead segments EBIT improves by 5.7% yoy

The Zinc-Lead segments sales increased by 4.4% yoy to `3,812cr, mainly due to

increased sales volumes of zinc and silver. Refined zinc production volumes grew

by 10.0% yoy to 173kt while refined silver production volumes grew 31.0% yoy to

96kt.

The cost of production for Zinc (excluding royalty) stood at US$836/tonne in

1QFY2014 compared to US$844/tonne in 1QFY2013. Overall, the EBIT of the

Zinc-Lead segment (including international Zinc business) increased by 5.7% yoy to

`1,481cr.

126119

195

159

21

(23)23

4

43

929

(26)

(5.0)

0.0

5.0

10.0

15.0

20.0

25.0

30.0

(50)

0

50

100

150

200

250

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

1QFY14

(%)

(`cr)


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Exhibit 5:Zinc segments EBIT stood at `1,481cr


2,185

1,813

1,650 1,4861,705

1,402 1,512 1,634

2,306

1,481

0.0

10.0

20.0

30.0

40.0

50.0

60.0

0

500

1,000

1,500

2,000

2,500

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

1QFY14

(%)

(`cr)


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Investment rationale

Zinc-Lead expansion to aid growth: Sterlites subsidiary, Hindustan Zinc (HZL) hascommenced work at its underground Kayar mine, which has 11mn tonne of high-

grade reserves (10-12% zinc content). The company expects to increase its capacity

from 1.0mn tonne to 1.2mn tonne. Moreover, given the cash-rich balance sheet,

HZL is actively exploring greenfield projects through prospecting licenses and

mining lease projects across different states.

Ban on Sesa Goas mines in Goa remains a concern: During 2QFY2013, the Goagovernment had imposed a ban on iron ore mining in Goa until further review.

Later, the Ministry of Environment and Forest Clearances (MOEF) also suspended

environment clearances to all functional mining leases in Goa. Sesa Goa operated

several mines in the region with an annual production of 12mn tonne. While we

believe the ban could be temporary, there are chances of iron ore production cap

by the government/MOEF which could affect Sesas production going forward. This

is likely to be a key overhang on the stock in our view.

Outlook and Valuation

We expect Sterlite to benefit from the expansion of Zinc-Lead smelting capacity

during FY2014-15. While we expect the Aluminium segments profitability to

remain under pressure, the current stock price factors these concerns.

Considering the ongoing process of group restructuring by the promoter, Vedanta

Resources, the valuation of Sterlite will mirror the valuation of the consolidated

company - Sesa Sterlite. We value Sterlite at `97, based on the SOTP methodologyand recommend Accumulate rating on the stock.

Exhibit 6:SOTP valuation of Sterlite (` cr)

Subsidiary Valuation technique Target multiple (x) Equity value % Stake ValueSterlite Industries EV/EBIDTA 6.0 9,691 100% 9,691

Balco EV/EBIDTA 6.0 2,708 51% 1,381

Vedanta Aluminium EV/EBIDTA 6.0 (4,794) 100% (4,794)

Hindustan Zinc (20% holding company discount) EV/EBIDTA 4.0 58,968 65% 30,616

Sterlite Energy FCFE 1.0 472 100% 472

Tasmania Copper mines P/BV 2.0 2,018 100% 2,018International Zinc EV/EBIDTA 5.0 7,333 100% 7,333

MALCO BV 100% 1,712

Sesa Goa EV/EBIDTA 4.0 595 100% 595

Cairn India (20% holding company discount) DCF 72,847 59% 34,267

Less: Cairn debt (28,797)

Net equity value 54,495Fair value for Sesa Sterlite (`) 162Fair value for Sterlite (`) 97

Source: Angel Research

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Exhibit 7:EPS Angel forecast vs consensus

Year (%) Angel forecast Bloomberg consensus Variation (%)FY2014E 16.8 18.1 (7.0)

FY2015E 19.2 20.1 (4.4)Source: Angel Research

Exhibit 8:EV/EBITDA band

Source: Bloomberg, Angel Research

Exhibit 9:P/E band


0

20,000

40,000

60,000

80,000

100,000

120,000

Jun-09 Jan-10 Aug-10 Mar-11 Oct-11 May-12 Dec-12 Jul-13

(`cr)

2.0x 4.0x 6.0x 8.0x 10.0x

0

50

100

150

200

250

300

350

Apr-09 Sep-09 Feb-10 Jul-10 Dec-10May-11Oct-11Mar-12Aug-12 Jan-13 Jun-13

(`)

4.0x 8.0x 12.0x 16.0x

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Exhibit 10:P/BV band


Exhibit 11:Recommendation summary

Company CMP TP Reco. Mcap Upside P/E (x) P/BV (x) EV/EBITDA (x) RoE (%) RoCE (%)(`) (`) (` cr) (%) FY14E FY15E FY14E FY15E FY14E FY15E FY14E FY15E FY14E FY15E

Hindalco 94 - Neutral 18,112 - 7.2 6.4 0.5 0.5 6.3 5.6 7.2 7.5 5.4 5.5

Nalco 29 32 Neutral 7,525 - 11.4 11.1 0.6 0.6 3.2 3.2 5.4 5.5 3.4 3.5

Sterlite 77 97 Buy 25,743 26 4.6 4.0 0.5 0.4 1.9 1.5 10.5 10.9 8.1 8.2HZL 103 140 Buy 43,563 35 6.8 6.1 1.2 1.0 2.7 1.7 18.5 17.9 15.2 15.0

Source: Angel Research

Company background

Sterlite is India's largest non-ferrous metals and mining company. The company

produces Zinc, Lead and Silver through its 65%-owned subsidiary, Hindustan Zinc

(HZL) which has a Zinc production capacity of 1.1mn tonne. HZL contributes

~80% to Sterlites consolidated EBITDA. Sterlite also produces Aluminium (capacity

- 0.7mn tonne). It also has world-class Copper smelting and refining operations

(capacity - 0.4mn tonne). In February 2011, Sterlite, through its wholly owned

subsidiary, Sterlite Infra, acquired 100% stake in Namibian Skorpian Mines

(Skorpian) for a cash consideration of US$707mn. Skorpion Mines has reservesand resources of 8.7mn tonne of Zinc and Lead. During January 2012, Vedanta

Resources (Sesa Goas and Sterlites promoters) announced a plan to merge Sesa

Goa with Sterlite. The merger has been approved by the shareholders of both the

companies and is currently awaiting various court approvals.

0

50

100

150

200

250

300

350

400

Apr-09 Sep-09 Feb-10 Jul-10 Dec-10 May-11Oct-11Mar-12Aug-12 Jan-13 Jun-13

(`)

0.5x 1.0x 1.5x 2.0x

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Profit & Loss Statement (Consolidated)

Y/E March (` cr) FY2010 FY2011 FY2012 FY2013 FY2014E FY2015ETotal operating income 24,682 30,429 41,179 45,162 44,493 45,599% chg 16.7 23.3 35.3 9.7 (1.5) 2.5Total Expenditure 18,207 22,379 31,316 34,693 34,539 34,688

Net Raw Materials 12,139 14,370 18,844 20,940 21,446 21,979

Other Mfg costs 5,214 6,877 10,859 11,873 11,225 10,794

Personnel 854 1,132 1,612 1,880 1,869 1,915

EBITDA 6,475 8,050 9,863 10,469 9,954 10,911% chg 37.6 24.3 22.5 6.1 (4.9) 9.6

(% of Net Sales) 26.4 26.5 24.0 23.2 22.4 23.9

Depreciation & Amortization 750 1,030 1,830 2,032 2,431 2,568

EBIT 5,725 7,020 8,034 8,437 7,523 8,343% chg 43.0 22.6 14.4 5.0 (10.8) 10.9

(% of Net Sales) 23.2 23.1 19.5 18.7 16.9 18.3

Interest & other Charges 292 351 852 922 1,298 1,331

Other Income 1,506 2,522 3,163 3,453 3,826 3,876

(% of PBT) 21.7 27.4 30.6 31.5 38.1 35.6

Recurring PBT 6,939 9,191 10,344 10,968 10,051 10,888% chg 20.5 32.4 12.6 6.0 (8.4) 8.3

Extraordinary Inc/(Expense) (297) (57) (473) (101) - -

PBT (reported) 6,642 9,134 9,872 10,867 10,051 10,888Tax 1,233 1,812 2,111 1,618 1,508 1,633

(% of PBT) 18.6 19.8 21.4 14.9 15.0 15.0

PAT (reported) 5,409 7,322 7,761 9,249 8,543 9,255Add: Share of earnings of asso. 59 (285) (772) (660) (490) (386)

Less: Minority interest (MI) 1,724 1,995 2,161 2,529 2,392 2,406

Extraordinary Expense/(Inc.) - - - - - -

PAT after MI (reported) 3,744 5,043 4,828 6,060 5,661 6,463ADJ. PAT 3,986 5,088 5,200 6,146 5,661 6,463% chg 14.1 27.7 2.2 18.2 (7.9) 14.2

(% of Net Sales) 16.1 16.7 12.6 13.6 12.7 14.2

Basic EPS (`) 11.9 15.0 14.4 18.3 16.8 19.2Fully Diluted EPS ( ) 11.9 14.3 15.5 18.3 16.8 19.2% chg (3.8) 20.8 8.0 18.2 (7.9) 14.2

Note: Some of the figures from FY2011 onwards are reclassified; hence not comparable with

previous year numbers

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Balance Sheet (Consolidated)

Y/E March (` cr) FY2010 FY2011 FY2012 FY2013 FY2014E FY2015ESOURCES OF FUNDSEquity Share Capital 168 336 336 336 336 336Reserves& Surplus 36,844 41,099 45,720 50,961 55,960 61,666

Shareholders Funds 37,012 41,435 46,056 51,297 56,296 62,002Share Warrants - - - - - -

Minority Interest 8,410 10,291 12,199 14,728 17,120 19,526

Total Loans 9,260 10,948 14,473 19,473 19,973 20,473

Deferred Tax Liability 1,552 2,179 2,208 2,208 2,208 2,208

Other Long term liabilities - 3,530 5,728 5,728 5,728 5,728

Long term Provisions - 8,299 8,930 8,930 8,930 8,930

Total Liabilities 56,234 66,036 76,401 89,172 97,062 105,675APPLICATION OF FUNDSGross Block 18,179 31,125 37,226 43,726 51,726 59,726

Less: Acc. Depreciation 5,913 9,727 11,755 13,787 16,218 18,786

Net Block 12,266 21,397 25,471 29,939 35,508 40,940Capital Work-in-Progress 11,084 9,919 12,092 10,092 8,092 6,092

Goodwill - - - - - -

Investments 20,304 12,904 17,623 17,623 17,623 17,623

Long term loans and adv. - 33,918 43,442 43,442 43,442 43,442

Other Non Current Assets - 6,051 6,806 7,663 7,663 7,663

Deferred tax assets - 52 - - - -

Current Assets 17,511 26,224 25,272 35,291 39,596 44,794Cash 3,338 9,502 8,539 17,697 22,109 27,130

Loans & Advances 10,499 9,575 9,964 9,964 9,964 9,964

Other 3,674 7,147 6,316 7,178 7,071 7,247

Current liabilities 4,932 8,410 9,082 8,884 8,868 8,884Net Current Assets 12,580 17,814 16,190 26,407 30,729 35,910Mis. Exp. not written off 0.0 0.0 0.0 0.0 0.0 0.0

Total Assets 56,234 66,036 76,401 89,172 97,062 105,675

Note: Some of the figures from FY2011 onwards are reclassified; hence not comparable withprevious year numbers

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Cash Flow Statement (Consolidated)

Y/E March (` cr) FY2010 FY2011 FY2012 FY2013 FY2014E FY2015EProfit before tax 6,460 9,133 9,872 10,867 10,051 10,888

Depreciation 750 1,030 1,830 2,032 2,431 2,568Change in Working Capital (7,316) (319) 552 (1,059) 90 (160)

Others (1,483) (3,708) (5,464) - - -

Direct taxes paid 1,233 1,735 2,383 1,618 1,508 1,633

Share of loss from Asso. (285) (772) (660) (490) (386)

Cash Flow from Operations (2,822) 7,585 8,400 9,562 10,574 11,278(Inc.)/ Dec. in Fixed Assets (6,898) 5,349 7,396 (4,500) (6,000) (6,000)

(Inc.)/ Dec. in Investments (4,098.3) 7,553 805 - - -

(Inc.)/ Dec. in loans and adv. - - - - - -

Others - (9,696) (1,320) - - -

Cash Flow from Investing (10,996) (7,492) (9,522) (4,500) (6,000) (6,000)Issue of Equity 7,653 - - - - -

Inc./(Dec.) in loans 2,246 2,563 3,046 5,000 500 500

Dividend Paid (Incl. Tax) 449 (502) (1,311) (904) (662) (756)

Others (2,201) (457) (1,073) - - -

Cash Flow from Financing 11,651 1,604 662 4,096 (162) (256)Inc./(Dec.) in Cash (2,167) 1,698 (460) 9,158 4,411 5,022

Opening Cash balances 5,505 214 2,124 8,539 17,697 22,109Closing Cash balances 3,338 9,502 8,539 17,697 22,109 27,130

Note: Some of the figures from FY2011 onwards are reclassified; hence not comparable with

previous year numbers

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Key Ratios

Y/E March FY2010 FY2011 FY2012 FY2013 FY2014E FY2015EValuation Ratio (x)P/E (on FDEPS) 6.5 5.4 5.0 4.2 4.6 4.0P/CEPS 5.5 4.2 3.7 3.2 3.2 2.9

P/BV 0.7 0.6 0.6 0.5 0.5 0.4

Dividend yield (%) 1.7 2.3 3.1 3.5 2.6 2.9

EV/Sales 0.8 0.7 0.5 0.5 0.4 0.4

EV/EBITDA 3.2 2.6 2.2 2.0 1.9 1.5

EV / Total Assets 0.4 0.3 0.3 0.2 0.2 0.2

Per Share Data (`)EPS (Basic) 11.9 15.0 14.4 18.3 16.8 19.2

EPS (fully diluted) 11.9 14.3 15.5 18.3 16.8 19.2

Cash EPS 14.1 18.2 20.9 24.3 24.1 26.9

DPS 1.3 1.8 2.4 2.7 2.0 2.2

Book Value 110.1 123.3 137.0 152.6 167.5 184.4

Dupont AnalysisEBIT margin 23.2 23.1 19.5 18.7 16.9 18.3

Tax retention ratio (%) 81.4 80.2 78.6 85.1 85.0 85.0

Asset turnover (x) 0.6 0.7 0.7 0.7 0.7 0.6

ROIC (Post-tax) 11.2 12.1 11.3 11.7 9.6 9.8

Cost of Debt (Post Tax) 2.9 2.8 5.3 - - -

Leverage (x) 0.1 0.0 0.1 - - -

Operating ROE 12.2 12.2 11.9 11.7 9.6 9.8

Returns (%)ROCE (Pre-tax) 11.8 11.5 11.3 10.2 8.1 8.2

Angel ROIC (Pre-tax) 16.3 15.9 15.7 14.4 11.7 12.0

ROE 12.7 13.0 11.9 12.6 10.5 10.9

Turnover ratios (x)Asset Turnover (Gross Block) 1.5 1.2 1.2 1.1 0.9 0.8

Inventory / Sales (days) 41 49 43 43 43 43

Receivables (days) 11 13 15 15 15 15

Payables (days) 53 52 39 39 39 39

WC cycle (ex-cash) (days) 83 105 71 66 71 70

Solvency ratios (x)Net debt to equity 0.1 0.0 0.1 (0.0) (0.0) (0.1)

Net debt to EBITDA 0.7 0.1 0.4 (0.1) (0.2) (0.6)

Interest Coverage (EBIT / Int.) 19.6 20.0 9.4 9.1 5.8 6.3

Note: Some of the figures from FY2011 onwards are reclassified; hence some ratios may not be

comparable with previous year ratios

7/27/2019 Sterlite, 1Q FY 2014

13/13


J l 27 2013 13

Disclosure of Interest Statement Sterlite Industries

1. Analyst ownership of the stock No

2. Angel and its Group companies ownership of the stock No

3. Angel and its Group companies' Directors ownership of the stock No

4. Broking relationship with company covered No

Note: We have not considered any Exposure below `1 lakh for Angel, its Group companies and Directors.

Ratings (Returns) : Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)Reduce (-5% to -15%) Sell (< -15%)

Research Team Tel: 022 3935 7800 E-mail: [email protected] Website: www.angelbroking.com

DISCLAIMERThis document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment

decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make

such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies

referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and

risks of such an investment.

Angel Broking Pvt. Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make

investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this

document are those of the analyst, and the company may or may not subscribe to all the views expressed within.

Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and

trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's

fundamentals.The information in this document has been printed on the basis of publicly available information, internal data and other reliablesources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as thisdocument is for general guidance only. Angel Broking Pvt. Limited or any of its affiliates/ group companies shall not be in any wayresponsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report .Angel Broking Pvt. Limited has not independently verified all the information contained within this document. Accordingly, we cannottestify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document.While Angel Broking Pvt. Limited endeavours to update on a reasonable basis the information discussed in this material, there may beregulatory, compliance, or other reasons that prevent us from doing so.

This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,

redistributed or passed on, directly or indirectly.

Angel Broking Pvt. Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment bankingor other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or

in the past.

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or in connection with the use of this information.

Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to thelatest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Pvt. Limited and its affiliates mayhave investment positions in the stocks recommended in this report.

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Sterlite, 1Q FY 2014

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