Hold Sterlite Technologies; target of Rs 216: Nalanda Securities

April 24
20:24 2019

Nalanda Securities’ research report on Sterlite Technologies

Sterlite Technologies (SOTL) reported Q4 FY19 revenue at INR 1,791 crore; up 111% YoY and 34% Q-o-Q; EBITDA for the company stood at INR 315 crore, up 46% YoY and 8% Q-o-Q; PAT was reported at INR 166 crore; up 38% YoY and 12% Q-o-Q. EBITDA margin reported were 18%; as against 22% QoQ and 26% YoY and PAT margins stood at 9% as against 11% QoQ and 14% YoY. Open order book at Rs 10,516 crore, 2.1 times the annual revenue. With these strong numbers, the Board of Directors has recommended final dividend of INR 3.5/ share for FY’19.


At CMP of INR 207.35, the company is trading at 7.7x FY21E EPS and 5.3x FY21 EV/EBITDA. We value the company using an average of P.E. and EV/EBITDA methodology giving an exit multiple of 8 and 5.5 respectively on FY21 basis, achieving a target price of INR 216 which is an upside of 4%. We have a HOLD rating on the stock.

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