2QFY2013 Result Update | Base Metals

October 26, 2012

Sterlite Industries
Performance Highlights

ACCUMULATE
CMP Target Price
Investment Period
2QFY12 % chg (yoy) 10,134 2,407 23.8 1,028 8.8 5.0 (84)bp 40.1 1QFY13 % chg (qoq) 10,591 2,308 21.8 1,419 4.1 9.5 112bp 1.5

`101 `110
12 months

Quarterly highlights (Consolidated)

Particulars (` cr) Net sales EBITDA % margin Adjusted PAT
Source: Company, Angel Research

2QFY13 11,029 2,527 22.9 1,441

Stock Info Sector Market Cap (` cr) Net Debt (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others Abs. (%) Sensex STLT 3m 11.9 3.2 1yr 7.7 (17.4) 53.3 9.2 13.5 24.0 3yr 13.9 (48.2) Base Metals 33,892 5,933 1.4 138/86 725,503 1 18,625 5,664 STRL.BO STLT@IN

Sterlite Industries (Sterlite)s 2QFY2013 net profit was higher-than expected mainly due to a better-than-expected performance from its aluminium segment. However, we recommend an Accumulate rating on the stock. Top-line growth driven by Aluminium and Power segments: For 2QFY2013, net sales increased 8.8% yoy to `11,029cr. The growth in net sales was driven by increases in aluminium, power and zinc segments revenues. Aluminium, power and zinc segment revenues grew 25.3%, 46.2% and 8.4% yoy to `859cr, `910cr and `3,870cr, respectively. Aluminium and Power segments boost profitability: Sterlites EBITDA increased by 5.0% yoy to `2,527cr; the EBITDA margin stood at 22.9% (higher than our estimate mainly due to better-than-expected profitability from the aluminium and power segments). The aluminium segments EBIT grew by 106.5% yoy to `43cr and the power segment EBIT grew 260.4% yoy to `190cr. The company reported an exceptional item relating to forex gain of `302cr (including that of its associate Vedanta Aluminium (VAL) compared to a forex loss of `276cr in 2QFY2012. Hence, the adjusted net profit increased 40.1% yoy to `1,441cr, which was above our estimate of `1,299cr. Outlook and valuation: We expect Sterlite to benefit from the expansion of zinc-lead smelting capacity during FY2013-14 although its aluminium segments profitability is expected to remain under pressure. Considering the ongoing process of group restructuring by the promoter, Vedanta Resources, the valuation of Sterlite will mirror the valuation of the consolidated company, Sesa Sterlite. On account of ban on mining in Goa, we have drastically cut Sesa Goas iron ore volumes for FY2013. We recommend an Accumulate rating on the stock.

Key financials (Consolidated)

Y/E March ( ` cr) Net sales % chg Net profit % chg FDEPS (`) OPM (%) P/E(x) P/BV(x) RoE(%) RoCE(%) EV/Sales (x) EV/EBITDA (x)
Source: Company, Angel Research

FY2011 30,429 24.2 5,043 34.7 14.3 26.5 7.0 0.8 12.9 11.5 1.1 4.0

FY2012 41,179 35.3 4,828 (4.3) 15.5 24.0 6.4 0.7 11.0 11.3 0.8 3.5

FY2013E 43,185 4.9 5,652 17.1 16.8 23.3 6.0 0.7 11.6 9.9 0.8 3.3

FY2014E 45,442 5.2 6,027 6.6 17.9 23.7 5.6 0.6 11.2 9.5 0.7 2.9

Bhavesh Chauhan
Tel: 022- 39357600 Ext: 6821 bhaveshu.chauhan@angelbroking.com

Vinay Rachh
Tel: 022- 39357600 Ext: 6841 Vinay.rachh@angelbroking.com

Please refer to important disclosures at the end of this report

Sterlite Industries | 2QFY2013 Result Update

Exhibit 1: 2QFY2013 Performance (Consolidated)

Y/E March (` cr) Net Sales - Consumption of Raw Material (% of Net Sales) - Power& Fuel (% of Net Sales) - Staff Costs (% of Net Sales) - Other expenses (% of Net Sales) Total Expenditure (% of Net Sales) Other operating Income EBITDA EBITDA margin (%) Interest Depreciation Other Income Exceptional Items Profit before Tax (% of Net Sales) Tax (% of PBT) Reported PAT Net income margin (%) FDEPS Adj. net profit
Source: Company, Angel Research

2QFY13 11,029 5,105 46.3 1,216 11.0 451 4.1 1,803 16.4 8,576 77.8 74 2,527 22.9 178 522 848 302 2,894 26.2 511 17.7 2,383 21.6 5.2 1,441

2QFY12 10,134 4,772 47.1 1,040 10.3 393 3.9 1,584 15.6 7,789 76.9 62 2,407 23.8 237 446 801 (276) 2,279 22.5 505 22.2 1,744 17.2 3.0 1,028

% chg yoy 8.8 7.0 16.9 14.9 13.8 10.1 19.1 5.0 (25.1) 17.1 5.8 27.0 1.2 36.6 74.4 40.1

1QFY13 10,591 5,040 47.6 1,115 10.5 450 4.3 1,735 16.4 8,340 78.7 57 2,308 21.8 242 518 948 (217) 2,279 21.5 334 14.7 1,945 18.4 3.6 1,419

% chg qoq 4.1 1.3 9.0 0.2 4.0 2.8 29.1 9.5 (26.5) 0.8 (10.6) 27.0 53.0 22.5 45.1 1.5

1HFY13 21,620 10,145 46.9 2,331 10.8 902 4.2 3,538 16.4 16,916 78.2 131 4,835 22.4 420 1,040 1,796 84 5,173 23.9 845 16.3 4,328 20.0 8.8 2,860

1HFY12 19,961 9,085 45.5 2,015 10.1 778 3.9 3,024 15.1 14,902 74.7 99 5,157 25.8 402 866 1,583 223 5,250 26.3 1,119 21.3 4,131 20.7 7.9 4,354

% chg yoy 8.3 11.7 15.7 15.9 17.0 13.5 32.6 (6.2) 4.5 20.1 13.5 (62.1) (1.5) (24.5) 4.8 11.6 (34.3)

Exhibit 2: 2QFY2013 Actual vs Angel estimates

(` cr) Net sales EBITDA EBITDA margin (%) Adj. net profit
Source: Company, Angel Research

Actual 11,029 2,527 22.9 1,441

Estimates 11,121 2,531 19.7 1,299

Variation (%) (0.8) (0.2) 321bp 10.9

October 26, 2012

Sterlite Industries | 2QFY2013 Result Update

2QFY2013 result highlights

Sterlites 2QFY2013 net profit was higher-than expected, mainly due to a better-than-expected performance from its aluminium segment. The net sales increased 8.8% yoy to `11,029cr, in line with our estimate of `11,121cr. The growth in net sales was driven by increases in aluminium, power and zinc segments revenues. Aluminium, power and zinc segment revenues grew 25.3%, 46.2% and 8.4% yoy to `859cr, `910cr and `3,870cr, respectively. On the operating front, Sterlites EBITDA increased by 5.0% yoy to `2,527cr; the EBITDA margins were 22.9% (above our estimate of 19.7%) mainly due to better profitability in the aluminium and power segments. The aluminium segments EBIT grew by 106.5% yoy to `43cr and the power segments EBIT grew 260.4% yoy to `190cr. The company reported an exceptional item relating to forex gain of `302cr (including that of its associate VAL) compared to a forex loss of `276cr in 2QFY2012. The interest costs this quarter declined by 25.1% yoy to `178cr and other income grew by 5.8% yoy to `848cr. Hence, the adjusted net profit increased 40.1% yoy to `1,441cr, which was above our estimate of `1,299cr. The reported net profit increased 36.6% yoy to `2,383cr.

Segmental performance
Copper segments TC/RC falls by 13.0% yoy
During 2QFY2012, copper cathode production at the Tuticorin smelter was flat yoy at 87k tonne. However, mined metal from the Australian mines increased by 14% yoy to 6k tonne. The copper segments revenues increased marginally by 1.8% yoy to `5,219cr during the quarter. Copper treatment charges and refining charges (TC/RC) decreased by 13.0% yoy to USc11.3/lb. The company reported a cost of production of USc7.1lb in 2QFY2013 compared to USc(3.7)/lb in 2QFY2012. The copper business had an exceptional item of `161cr related to forex gain. Consequently, the copper segments PAT increased by 62% yoy to `475cr in 2QFY2013. However, the PAT, excluding exceptional items, decreased by 21.1% to `314cr during the quarter.

Exhibit 3: Copper segments EBIT stood at `277cr

350 300 250 215 141 188 194 158 298 291 309 326 273 201 277 7.0 6.0 5.0

(` cr)

150 100 50 0

3.0 2.0 1.0 0.0

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

EBIT (LHS)
Source: Company, Angel Research

EBIT margins (RHS)

October 26, 2012

2QFY13

(%)

200

4.0

Sterlite Industries | 2QFY2013 Result Update

Aluminium segments EBIT increases 106.5% yoy basis

During the quarter, Bharat Aluminium Company (Balco)s aluminium production rose by 4.0% to 63kt, and its revenue increased by 25.0% yoy to `859cr, mainly due to higher premium. The cost of production of aluminium at Balco increased by 10.0% yoy to `1,08,800/tonne on account higher proportion of coal costs; the prices of coal were higher yoy due to tapering of coal linkages, higher rail freight and carbon costs. However, the aluminium segments EBIT rose by 106.5% to `43.3cr in 2QFY2013 mainly because of a better product mix. Sterlites associate, VAL, also reported a loss of `206cr in 2QFY2013 (Sterlites share of loss `61cr) compared to a loss of `823cr in 2QFY2012. The lower loss in 2QFY2013 was mainly due to better cost performance and a forex gain amounting to `280cr.

Exhibit 4: Aluminium segments EBIT improves to `43cr

250 200 150 195 163 126 83 50 21 (23) 23 4 43 119 159 30.0 25.0 20.0 15.0 10.0 5.0 0.0

(` cr)

50 0

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

(50)

2QFY13

(5.0)

EBIT (LHS)
Source: Company, Angel Research

EBIT margins (RHS)

Zinc-Lead segments EBIT declines by 8.4% yoy

Refined zinc production for 2QFY2013 declined by 12.0% yoy to 163kt tonne. Refined lead production grew by 60.0% to 27kt and refined silver production increased by 86.0% to 92k tonne during the quarter. The cost of production for zinc (excluding royalty) stood at US$844/tonne in 2QFY2013 compared to US$847/tonne in 2QFY2012. Overall, the EBIT of the zinc-lead segment (including international zinc business) declined by 8.4% yoy to `1,512cr.

October 26, 2012

(%)

100

Sterlite Industries | 2QFY2013 Result Update

Exhibit 5: Zinc segments EBIT declines by 8.4% yoy

2,500 2,000 1,500 1,000 500 0 1,447 1,306 905 1,003 1,430 2,185 70.0 60.0 1,813 1,705 1,650 1,512 50.0 1,486 1,402 40.0 30.0 20.0 10.0 0.0

(` cr)

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

EBIT (LHS)
Source: Company, Angel Research

EBIT margins (RHS)

Investment rationale
Zinc-Lead expansion to aid growth: Sterlite had commissioned a 100ktpa lead smelter at Rajpura Dariba in 1QFY2012, the full benefits of which will be witnessed in FY2013. Moreover, the expansion at the silver-rich Sindesar Khurd mine is expected to result in robust lead and silver sales volume growth in FY2013 and FY2014. SEL to reach full production capacity in FY2013: Sterlite Energy Ltd (SEL)s fourth unit of 600MW has been synchronized during 4QFY2012 and is likely to commence commercial production from 2QFY2013, the benefits of which will be reflected in FY2014. Ban on Sesa Goas mines in Goa remains a concern: During 2QFY2013, the Goa government imposed a ban on iron ore mining in Goa until further review. Later, the Ministry of Environment and Forests (MOEF) also suspended environment clearances to all functional mining leases in Goa. Sesa Goa operates several mines in the region with an annual production of 12mn tonne. While we believe the ban could be temporary, there are chances of iron ore production cap by the government/MOEF which could affect Sesa Goas production going forward. This is likely to be a key overhang on the stock in our view.

Outlook and valuation

We expect Sterlite to benefit from the expansion of zinc-lead smelting capacity during FY2013-14. Sterlites expansion in the silver-rich Sindesar Khurd mine is expected to result in a net profit growth of 8.2% in FY2013 and 6.6% in FY2014. While we expect the aluminium segments profitability to remain under pressure, the current stock price factors these concerns. Considering the ongoing process of group restructuring by the promoter, Vedanta Resources, valuation of Sterlite will mirror the valuation of the consolidated company, Sesa Sterlite. We value Sterlite at `110, based on the SOTP methodology and recommend Accumulate rating on the stock.

October 26, 2012

2QFY13

(%)

Sterlite Industries | 2QFY2013 Result Update

Exhibit 6: SOTP valuation of Sterlite

Subsidiary Sterlite Industries Balco Vedanta Aluminium Hindustan Zinc (20% holding company discount) Sterlite Energy Tasmania Copper mines International Zinc MALCO Sesa Goa Cairn India (20% holding company discount) less : Cairn debt Net equity value Fair value for Sesa Sterlite (`) Fair value for Sterlite (`)
Source: Angel Research

(` cr)
Valuation technique EV/EBIDTA EV/EBIDTA EV/EBIDTA EV/EBIDTA FCFE P/BV EV/EBIDTA BV EV/EBIDTA DCF Target multiple (x) 4.0 6.0 5.0 4.0 1.0 1.0 4.0 3.5 Equity value 12,337 (130) (9,473) 61,319 331 1,009 6,484 4,892 72,146 % Stake 100% 51% 100% 65% 100% 100% 100% 100% 100% 59% Value 12,337 (66) (9,473) 31,837 331 1,009 6,484 1,712 4,892 33,938 (28,797) 54,203 183 110

Exhibit 7: EPS Angel forecast vs consensus

Year (%) FY2013E FY2014E
Source: Angel Research

Angel forecast 16.8 17.9

Bloomberg consensus

Variation (%) (0.5) (5.6)

16.9 19.0

Exhibit 8: EV/EBITDA band

160,000 140,000 120,000 100,000
(`cr)

80,000 60,000 40,000 20,000 0 Oct-08 Apr-09 Oct-09 Apr-10 2.0x 5.0x Oct-10 Apr-11 Oct-11 Apr-12 Oct-12 8.0x 11.0x 14.0x

Source: Bloomberg, Angel Research

October 26, 2012

Sterlite Industries | 2QFY2013 Result Update

Exhibit 9: P/E band

450 400 350 300
(`)

250 200 150 100 50 0 Oct-08 Apr-09 Oct-09 Apr-10 10.0x Oct-10 Apr-11 15.0x Oct-11 Apr-12 20.0x Oct-12 5.0x

Source: Bloomberg, Angel Research

Exhibit 10: P/BV band

600 500 400 300 200 100 0 Oct-08 Apr-09 Oct-09 0.5x
Source: Bloomberg, Angel Research

(`)

Apr-10

Oct-10

Apr-11 2.5x

Oct-11

Apr-12 3.5x

Oct-12

1.5x

Exhibit 11: Recommendation summary

Company Hindalco Nalco Sterlite HZL CMP (`) 113 48
101

TP (`)

Reco.

Mcap Upside (` cr) (%) (7)

9

P/E (x) FY13E 8.6 25.0

6.0

P/BV (x) FY14E 0.6 1.0

0.6 1.5

EV/EBITDA (x) FY13E 7.4 14.0

3.3 5.0

RoE (%) 6.2 8.6

2.9 3.7

RoCE (%) 8.9 6.8 5.4 1.4

9.9 19.4

FY14E FY13E 7.0 15.6

5.6

FY14E FY13E FY14E FY13E FY14E 7.8 4.3

11.6 21.4

- Neutral 21,651 44 Reduce 12,319

110 Accum. 33,892

0.6 1.1
0.7 1.7

5.7 4.6
9.5 18.1

11.2 19.7

132

145 Accum. 55,795

10

8.8

8.1

Source: Angel Research

October 26, 2012

Sterlite Industries | 2QFY2013 Result Update

Company background
Sterlite is India's largest non-ferrous metals and mining company. The company produces zinc, lead and silver through its 65%-owned subsidiary, Hindustan Zinc (HZL) with zinc production capacity of 1.1mn tonne. HZL contributes ~80% to Sterlites consolidated EBITDA. Sterlite also produces aluminium (capacity - 0.7mn tonne). It also has world-class copper smelting and refining operations (capacity 0.4mn tonne). In February 2011, Sterlite, through its wholly owned subsidiary, Sterlite Infra, acquired a 100% stake in Namibian Skorpion Mines for a cash consideration of US$707mn. Skorpion mines has reserves and resources of 8.7mn tonne of zinc and lead. During January 2012, Vedanta Resources (Sesa Goa and Sterlite promoters) announced a plan to merge Sesa Goa with Sterlite. The merger has been approved by the shareholders of both the companies and it is currently awaiting various court approvals.

October 26, 2012

Sterlite Industries | 2QFY2013 Result Update

Profit & Loss Statement (Consolidated)

Y/E March (` cr) Gross sales Less: Excise duty Net Sales Other operating income Total operating income % chg Total Expenditure Net Raw Materials Other Mfg costs Personnel Other EBITDA % chg (% of Net Sales) Depreciation& Amortisation EBIT % chg (% of Net Sales) Interest & other Charges Other Income (% of PBT) Share in profit of Associates Recurring PBT % chg Extraordinary Inc/(Expense) PBT (reported) Tax (% of PBT) PAT (reported) Add: Share of earnings of asso. Less: Minority interest (MI) Extraordinary Expense/(Inc.) PAT after MI (reported) ADJ. PAT % chg (% of Net Sales) Basic EPS (`) Fully Diluted EPS (`) % chg
previous year numbers

FY09 22,774 1,629 21,144 21,144 (14.4) 16,440 10,634 5,050 756 4,704 (40.2) 22.2 701 4,003 (45.0) 18.9 397 2,154 37.4 5,760 (32.4) 55 5,816 855 14.7 4,961 (154) 1,267 3,540 3,493 (21.3) 16.5 12.3 12.3 (21.3)

FY10 25,614 1,204 24,501 182 24,682 16.7 18,207 12,139 5,214 854 6,475 37.6 26.4 750 5,725 43.0 23.2 292 1,506 21.7 6,939 20.5 (297) 6,642 1,233 18.6 5,409 59 1,724 3,744 3,986 14.1 16.1 11.9 11.9 (3.8)

FY11 32,276 1,847 30,429 30,429 23.3 22,379 14,370 6,877 1,132 8,050 24.3 26.5 1,030 7,020 22.6 23.1 351 2,522 27.4 9,191 32.4 (57) 9,134 1,812 19.8 7,322 (285) 1,995 5,043 5,088 27.7 16.7 15.0 14.3 20.8

FY12 43,116 1,937 41,179 41,179 35.3 31,316 18,844 10,859 1,612 9,863 22.5 24.0 1,830 8,034 14.4 19.5 852 3,163 30.6 10,344 12.6 (473) 9,872 2,111 21.4 7,761 (772) 2,161 4,828 5,225 2.7 12.7 14.4 15.5 8.5

FY13E 46,940 3,755 43,185 43,185 4.9 33,119 20,902 10,404 1,814 10,066 2.1 23.3 2,143 7,923 (1.4) 18.3 809 3,671 34.0 10,785 4.3 10,785 2,373 22.0 8,413 (657) 2,103 5,652 5,652 8.2 13.1 16.8 16.8 8.2

FY14E 49,393 3,951 45,442 45,442 5.2 34,652 21,903 10,840 1,909 10,790 7.2 23.7 2,483 8,307 4.8 18.3 1,006 3,726 33.8 11,028 2.2 11,028 2,426 22.0 8,602 (596) 1,978 6,027 6,027 6.6 13.3 17.9 17.9 6.6

Note: Some of the figures from FY2011 onwards are reclassified; hence not comparable with

October 26, 2012

Sterlite Industries | 2QFY2013 Result Update

Balance Sheet (Consolidated)

Y/E March (` cr) SOURCES OF FUNDS Equity Share Capital Reserves& Surplus Shareholders Funds Share Warrants Minority Interest Total Loans Deferred Tax Liability Other Long term liabilities Long term Provisions Total Liabilities APPLICATION OF FUNDS Gross Block Less: Acc. Depreciation Net Block Capital Work-in-Progress Goodwill Investments Long term loans and advances Other Non Current Assets Deferred tax assets Current Assets Cash Loans & Advances Other Current liabilities Net Current Assets Mis. Exp. not written off Total Assets
previous year numbers

FY09 142 25,471 25,613 6,813 7,014 1,408 40,847 15,387 5,155 10,232 6,979 16,206 11,636 5,505 2,715 3,416 4,205 7,431 0.0 40,847

FY10 168 36,844 37,012 8,410 9,260 1,552 56,234 18,179 5,913 12,266 11,084 20,304 17,511 3,338 10,499 3,674 4,932 12,580 0.0 56,234

FY11 336 41,099 41,435 10,291 10,948 2,179 3,530 8,299 66,036 31,125 9,727 21,397 9,919 12,904 33,918 6,051 52 26,224 9,502 9,575 7,147 8,410 17,814 0.0 66,036

FY12 336 45,720 46,056 12,199 14,473 2,208 5,728 8,930 76,401 37,226 11,755 25,471 12,092 17,623 43,442 6,806 25,272 8,539 9,964 6,316 9,082 16,190 0.0 76,401

FY13E 336 50,711 51,047 14,302 14,973 2,208 5,728 8,930 83,995 43,726 13,898 29,828 10,092 17,623 43,442 6,806 30,142 12,367 9,964 7,358 8,715 21,427 0.0 83,995

FY14E 336 56,032 56,369 16,280 15,473 2,208 5,728 8,930 91,796 51,726 16,380 35,345 8,092 17,623 43,442 6,806 34,590 16,431 9,964 7,743 8,880 25,710 0.0 91,796

Note: Some of the figures from FY2011 onwards are reclassified; hence not comparable with

October 26, 2012

10

Sterlite Industries | 2QFY2013 Result Update

Cash Flow Statement (Consolidated)

Y/E March (` cr) Profit before tax Depreciation Change in Working Capital Others Direct taxes paid Share of loss from Asso. Cash Flow from Operations (Inc.)/ Dec. in Fixed Assets (Inc.)/ Dec. in Investments (Inc.)/ Dec. in loans and advances Others Cash Flow from Investing Issue of Equity Inc./(Dec.) in loans Dividend Paid (Incl. Tax) Others Cash Flow from Financing Inc./(Dec.) in Cash Opening Cash balances Closing Cash balances
previous year numbers

FY09 5,816 701

FY10 6,460 750

FY11 9,133 1,030 (319) 1,735 (285) 7,585 5,349 7,553 -

FY12 1,830

FY13E 2,143 2,373 (657)

FY14E 2,483 (219) 2,426 (596)

9,872 10,785 11,028 552 (1,409) 2,383 (772) 8,400 805 -

1,244 (7,316) (1,421) (1,483) 855 1,233

(3,708) (5,464)

5,484 (2,822) (5,340) (6,898) 88(4,098.3) 1,939 248 7,653 2,246 449

8,489 10,269 500 661 (161) 3,828 500 705 (205) 4,064

7,396 (4,500) (6,000)

(9,696) (1,320) 2,563 3,046

(5,252) (10,996)

(7,492) (9,522) (4,500) (6,000)

(502) (1,311) (457) (1,073) 1,604 1,698 214 9,502 662 (460) 2,124

(1,128) (2,201) 2,819 11,651 3,051 (2,167) 2,454 5,505 5,505 3,338

8,539 12,367

8,539 12,367 16,431

Note: Some of the figures from FY2011 onwards are reclassified; hence not comparable with

October 26, 2012

11

Sterlite Industries | 2QFY2013 Result Update

Key Ratios
Y/E March Valuation Ratio (x) P/E (on FDEPS) P/CEPS P/BV Dividend yield (%) EV/Sales EV/EBITDA EV / Total Assets Per Share Data (`) EPS (Basic) EPS (fully diluted) Cash EPS DPS Book Value Dupont Analysis EBIT margin Tax retention ratio (%) Asset turnover (x) ROIC (Post-tax) Cost of Debt (Post Tax) Leverage (x) Operating ROE Returns (%) ROCE (Pre-tax) Angel ROIC (Pre-tax) ROE Turnover ratios (x) Asset Turnover (Gross Block) Inventory / Sales (days) Receivables (days) Payables (days) WCcycle (ex-cash) (days) Solvency ratios (x) Net debt to equity Net debt to EBITDA Interest Coverage (EBIT / Int.)
comparable with previous year ratios

FY09 8.1 6.8 1.1 1.4 1.0 4.3 0.5 12.3 12.3 14.8 1.4 90.4 18.9 85.3 0.7 12.0 5.6 0.0 12.2 10.6 13.9 14.6 1.4 50 15 41 44 0.0 0.1 10.1

FY10 8.4 7.1 0.9 1.3 1.1 4.4 0.5 11.9 11.9 14.1 1.3 110.1 23.2 81.4 0.6 11.2 2.9 0.1 12.2 11.8 16.3 12.7 1.5 41 8 53 83 0.1 0.7 19.6

FY11 7.0 5.5 0.8 1.8 1.1 4.0 0.5 15.0 14.3 18.2 1.8 123.3 23.1 80.2 0.7 12.1 2.8 0.0 12.2 11.5 15.9 13.0 1.2 49 19 52 105 0.0 0.1 20.0

FY12 6.4 4.8 0.7 1.8 0.8 3.5 0.4 14.4 15.5 21.0 1.8 137.0 19.5 78.6 0.7 11.3 5.3 0.1 11.9 11.3 15.7 11.9 1.2 43 19 39 71 0.1 0.4 9.4

FY13E 5.9 4.3 0.7 2.0 0.8 3.3 0.4 16.8 16.8 23.2 2.0 151.9 18.3 78.0 0.7 10.0 4.3 0.0 10.3 9.9 13.5 11.6 1.1 43 19 39 71 0.0 0.2 9.8

FY14E 5.6 4.0 0.6 2.1 0.7 2.9 0.3 17.9 17.9 25.3 2.1 167.7 18.3 78.0 0.7 9.6 9.6 9.5 12.9 11.2 1.0 43 19 39 74 (0.0) (0.1) 8.3

Note: Some of the figures from FY2011 onwards are reclassified; hence some ratios may not be

October 26, 2012

12

Sterlite Industries | 2QFY2013 Result Update

Research Team Tel: 022 3935 7800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

DISCLAIMER
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Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

Sterlite Industries No No No No

Note: We have not considered any Exposure below `1 lakh for Angel, its Group companies and Directors.

Ratings (Returns) :

Buy (> 15%) Reduce (-5% to 15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

October 26, 2012

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