Sterlite Industries consolidated PAT (adj) at Rs9.2bn in 3QFY10 rose 73% YoY (~7% below our estimates) gaining from an 83-87% jump in zinc-lead LME prices, better copper TC/RC margins and higher sales of power. Operating margin was 25% in 3QFY10 vs. 11% in 3QFY09 and 22% in 2QFY10.
Standalone (copper) PAT was Rs2.3bn. Operating profit rose 36% to Rs1.4bn and the operating margin was 3.8%. OPM was 61% vs. 26% last year due to 1) jump in zinc-lead prices; 2) 30% surge in lead volumes; 3) sale of 41,000t of zinc concentrate; 4) silver production up 44% YoY.
Aluminium OPM (excl power) was flat YoY at 19% (vs 18% in 2Q). Volumes fell 30% YoY (to 65,000t) as Balco’s old smelter is shut,
and led to the sale of surplus power.
Sterlite is expected to report an EPS of Rs 45 and Rs 75 for FY 2010 and FY2011 respectively.