Q4FY21 Result Update - Sterlite Technologies - ICICI Direct

Sterlite Tech's (STL) performance for Q4FY21 was a mixed bag with a slight topline beat but lower-than-expected margins. Revenues came in at Rs. 1475 crore, up 27.1% YoY. We note that growth is on a benign base as Q4FY20 had 35% YoY decline. Product and services were in the ratio of 55:45. EBITDA came in at Rs. 256.5 crore, up 18.7% YoY, driven by topline growth. Reported EBITDA margins came in at 17.4% (vs. our estimate of 18.1%), down 123 bps YoY, given the higher employee and other expenses. PAT at Rs. 124.4 crore, up 54.9% YoY, was higher than expected, aided by lower depreciation and higher other income.

Valuation & Outlook

The revenue growth recovery, albeit on a benign base, is positive. The FCF of Rs. 86 crore in FY21 was utilised in inorganic expansion (Rs. 266 crore), buyback and dividends (totalling Rs. 240 crore), resulting in increase of Rs. 440 crore of net debt at Rs. 2410 crore with net debt/EBITDA at 3x. We would await improvement in leverage, better capital allocation and pricing improvement before turning constructive. We maintain HOLD, with a revised target price of Rs. 240/share (earlier Rs. 200/share).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_SterliteTech_Q4FY21.pdf

Shares of STERLITE TECHNOLOGIES LTD. was last trading in BSE at Rs.230.2 as compared to the previous close of Rs. 236.35. The total number of shares traded during the day was 43532 in over 1354 trades.

The stock hit an intraday high of Rs. 235.55 and intraday low of 229.8. The net turnover during the day was Rs. 10103019.

Source : Equity Bulls

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