Buy Sterlite Technologies; target of Rs 440: ICICI Direct


ICICI Direct’s research report on Sterlite Technologies

Revenues came in at | 846.6 crore, up 19.7% YoY, slightly below our expectations of | 866.6 crore (22.6% YoY growth). The key driver of revenue growth continued to be exports, which formed ~60% of the topline during the quarter, which grew ~97% YoY EBITDA came in at | 220.3 crore (I-direct estimate: | 208.0 crore), with EBITDA margin of 26%, much ahead of our estimate of 24%. EBITDA growth was due to increase in contribution of product business


Outlook

Given the robust growth potential (topline, earnings CAGR of 31.2%, 32.1%, respectively, in FY18-20E), we maintain our BUY rating on the stock. We value the company at 30x FY20E P/E to arrive at a target price of | 440.

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