Sterlite net up 130% on higher prices

Sterlite Industries, India’s diversified base metal producer, said its consolidated net profit for the quarter ended March 31 rose 130 per cent to Rs 1,380 crore on the back of higher metal prices and stronger sales figures.

Net sales for the company in the period grew 63.9 per cent to Rs 7,110 crore. Revenue from the zinc and lead businesses doubled, while copper sales rose 68 per cent, said the company.

The company also announced a bonus share issue and a stock split that moved the stock by six per cent to Rs 842.5 a share. Sensex, the benchmark index of the exchange, moved 0.3 per cent to 17,745 on Monday.

“In the last six to nine months we have seen consumption across metals growing at 18 to 20 per cent,” said Navin Agarwal, deputy executive chairman of Vedanta Resources, the holding company for Sterlite Industries. “We expect robust growth for commodities on the back of infrastructure growth in the country,” he said, giving an outlook for the company.

Sterlite controls Bharat Aluminium Company (Balco) and Hindustan Zinc which last month started production from a 210,000 metric-tonne capacity smelter in Rajasthan, a quarter ahead of schedule.

On the issue of the government’s residual stake sale in Balco, the company said last week’s hearing by arbitration panel remained inconclusive. “A small part of hearing has remained; it is likely to be completed in August,” said M S Mehta, chief executive of Vedanta Resources.

“Zinc and power will remain the growth driver for the company in the coming quarters,” said Giriraj Daga, an analyst with Mumbai-based brokerage Khandwala Securities.

Revenue from the power business (net of transmission and wheeling charges) for the quarter were Rs 164 crore and Rs 658 crore, respectively, compared with Rs 16 crore and Rs 77 crore in the corresponding prior periods. The company plans to bring an initial public offer for its power business subsidiary Sterlite Energy.