1QFY2014 Result Update | Base Metals

July 27, 2013

Sterlite Industries
Performance Highlights

BUY
CMP Target Price
Investment Period
% chg (yoy) (22.7) (5.9) 473bp (18.0) 4QFY13 12,609 3,307 26.2 1,964 % chg (qoq) (35.0) (34.3) 30bp (40.8)

`77 `97
12 months

Quarterly highlights (Consolidated) Particulars (` cr) Net sales EBITDA % margin Adjusted PAT 1QFY14 8,190 2,173 26.5 1,164 1QFY13 10,591 2,308 21.8 1,419

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 1.8 (15.2) 1yr 17.2 (23.7) 53.3 9.1 27.9 9.7 3yr 9.6 (56.0) Base Metals 25,743 1,410 1.5 123/74 506,027 1 19,748 5,886 STRL.BO STLT@IN

Source: Company, Angel Research

Sterlite Industries (Sterlite) reported lower-than-expected 1QFY2014 results. Both, the top-line as well as net profit were lower than our expectations, mainly due to lower-than-expected performance from the Copper segment. We recommend Buy rating on the stock. Top-line declines due to Copper segment: The companys net sales declined 22.7% yoy to `8,190cr (below our estimate of `8,372cr). The decline in net sales was mainly in the Copper segment due to temporary shutdown of the Tuticorin copper smelter in this quarter. However, the same was partially offset by higher revenues from the Power segment due to higher power sales from the Jharsuguda power plant. Copper segment revenues declined 52.3% yoy to `2,446cr Copper and Aluminium segments reported EBIT loss: On the operating front, Sterlites EBITDA declined 5.9% yoy to `2,173cr and the EBITDA margin stood at 26.5% (below our estimate of 28.6%) mainly due to a loss of `51cr and `26cr in the Copper and Aluminium segment respectively. Higher interest costs and taxes dent PAT: The companys interest costs increased by 49.6% yoy to `362cr due to non-capitalization of interest on the Jharsuguda plant and the tax rate was also higher at 16.8% compared to 14.7% in 1QFY2013; hence the adjusted net profit decreased by 18.0% yoy to `1,164cr, which was below our estimate of `1,198cr. Outlook and valuation: We expect Sterlite to benefit from the expansion of Zinc-Lead smelting capacity during FY2014-15 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. We recommend a Buy 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) FY2012 41,179 35.3 4,828 (4.3) 15.5 24.0 5.0 0.6 11.0 11.3 0.5 2.2 FY2013 45,162 9.7 6,060 25.5 18.3 23.2 4.2 0.5 12.5 10.2 0.5 2.0 FY2014E 44,493 (1.5) 5,661 (6.6) 16.8 22.4 4.6 0.5 10.5 8.1 0.4 1.9 FY2015E 45,599 2.5 6,463 14.2 19.2 23.9 4.0 0.4 10.9 8.2 0.4 1.5

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

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

Source: Company, Angel Research: Note: CMP as of July 26, 2013

Please refer to important disclosures at the end of this report

Sterlite Industries | 1QFY2014 Result Update

Exhibit 1: 1QFY2014 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) Minority Interest Share of profit/(loss) in associate Reported PAT Net income margin (%) FDEPS Adj. net profit
Source: Company, Angel Research

1QFY14 8,190 2,369 28.9 1,221 14.9 482 5.9 2,004 24.5 6,077 74.2 59 2,173 26.5 362 526 1,066 (230) 2,122 25.9 357 16.8 571 (260) 934 11.4 0.0 1,164

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 14.7 577 (167) 1,202 11.3 3.6 1,419

% chg yoy (22.7) (53.0) 9.5 7.0 15.5 (27.1) 3.6 (5.9) 49.6 1.4 12.4 (6.9) 6.8 (1.0) (22.3) (100.0) (18.0)

4QFY13 12,609 5,772 45.8 1,081 8.6 503 4.0 2,010 15.9 9,367 74.3 65 3,307 26.2 276 453 798 (40) 3,454 27.4 418 12.1 787.2 (206.4) 1,925 15.3 5.7 1,964

% chg qoq (35.0) (59.0) 13.0 (4.3) (0.3) (35.1) (8.4) (34.3) 31.2 15.9 33.6 (38.6) (14.7)

FY2013 44,922 20,883 46.5 4,420 9.8 1,880 4.2 7,454 16.6 34,637 77.1 240 10,469 23.3 922 2,032 3,453 (101) 10,867 24.2 1,618 14.9 2,529 (660)

FY2012 40,967 18,832 46.0 4,040 9.9 1,612 3.9 6,819 16.6 31,304 76.4 212 9,863 24.1 852 1,830 3,163 (473) 9,872 24.1 2,111 21.4 2,161 (772) 4,828 11.8 15.5 5,200

% chg yoy 9.7 10.9 9.4 16.6 9.3 10.6 13.4 6.1 8.2 11.0 9.2 (78.7) 10.1 (23.3) 17.0 (14.6) 25.5 18.2 18.2

(51.5) (100.0) (40.8)

6,060 13.5 18.3 6,146

Exhibit 2: 1QFY2014 Actual vs Angel estimates

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

Actual 8,190 2,173 26.5 1,164

Estimates 8,372 2,394 28.6 1,198

Variation (%) (2.2) (9.3) (207)bp (2.9)

July 27, 2013

Sterlite Industries | 1QFY2014 Result Update

1QFY2014 result highlights

Sterlite reported lower-than-expected 1QFY2014 results. Both, the top-line as well as net profit were lower than our expectations mainly due to a lower-than-expected performance from the Copper segment. The companys net sales declined 22.7%

yoy to `8,190cr (below our estimate of `8,372cr). The decline in net sales was mainly in the Copper segment due to temporary shutdown of the Tuticorin copper smelter in this quarter. However, the same was partially offset by higher revenues from the Power segment due to higher power sales from the Jharsuguda power plant. Copper segment revenues declined 52.3% yoy to `2,446cr. On the operating front, Sterlites EBITDA declined 5.9% yoy to `2,173cr while the EBITDA margin stood at 26.5% (below our estimate of 28.6%) mainly due to EBIT loss of `51cr and `26cr in the Copper and Aluminium segments respectively. Hence, the adjusted net profit decreased by 18.0% yoy to `1,164cr, which was below our estimate of `1,198cr.

Segmental performance
Copper segment reports loss due to plant shutdown
During 1QFY2014, copper cathode production at the Tuticorin smelter declined by 82.0% yoy to 16k tonne due to temporary closure of the smelter following an order of TNPCB over the alleged gas leaks. Metal mined from the Australian mines also decreased by 13.0% yoy to 6k tonne. Copper segment revenues declined by 52.3% yoy to `2,446cr during the quarter. Copper Tc/Rcs increased by 12.0% yoy to USc13.9/lb. The Copper segment reported a PAT loss of `190cr in 1QFY2014, mainly due to higher fixed expenses at the Tuticorin plant and lower production.

Exhibit 3: Copper segment reports an EBIT loss of `51cr

400 350 300 250 194 158 200 150 100 50 0 (51) 298 291 326 273 201 277 160 334 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 (1.0) (2.0) (3.0)

309

(` cr)

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

(50) (100)

EBIT (LHS)
Source: Company, Angel Research

EBIT margins (RHS)

Aluminium segment reports an EBIT loss of `26cr

During the quarter, Balcos Aluminium production was flat at 61kt and its revenue decreased by 5.0% yoy to `745cr mainly on account of lower sales volume and fall in metal prices. However this impact was partially offset by the depreciation of the Indian Rupee. The cost of production of Aluminium at Balco increased by 5.0% yoy
July 27, 2013

1QFY14

(%)

Sterlite Industries | 1QFY2014 Result Update

to `1,08,233/tonne on account of further tapering off of coal linkage as per the Coal Block policy and higher operating cost of captive power plant due to maintenance shutdown of one of the units of 540MW. As a result, the Aluminium segment reported an EBIT loss of `26cr in 1QFY2014 compared to a positive EBIT of `4cr in 1QFY2013. Sterlites associate, Vedanta Aluminium reported a loss of `881cr in 1QFY2014 (Sterlites share of loss `260cr) compared to a loss of `565cr in 1QFY2013. The higher loss in 1QFY2014 was primarily on account of higher interest cost. Interest cost was higher due to cessation of interest capitalization pertaining to the Jharsuguda-II smelter on account of delay in its commissioning.

Exhibit 4: Aluminium segments reported EBIT loss of `26cr

250 200 150 126 119 195 159 30.0 25.0 20.0 15.0 43 4 9 10.0 29 (26) 5.0 0.0 (5.0)

(` cr)

50 0

21 (23)

23

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

(50)

EBIT (LHS)
Source: Company, Angel Research

EBIT margins (RHS)

Zinc-Lead segments EBIT improves by 5.7% yoy

The Zinc-Lead segments sales increased by 4.4% yoy to `3,812cr, mainly due to increased sales volumes of zinc and silver. Refined zinc production volumes grew by 10.0% yoy to 173kt while refined silver production volumes grew 31.0% yoy to 96kt. The cost of production for Zinc (excluding royalty) stood at US$836/tonne in 1QFY2014 compared to US$844/tonne in 1QFY2013. Overall, the EBIT of the Zinc-Lead segment (including international Zinc business) increased by 5.7% yoy to `1,481cr.

July 27, 2013

1QFY14

(%)

100

Sterlite Industries | 1QFY2014 Result Update

Exhibit 5: Zinc segments EBIT stood at `1,481cr

2,500 2,000 2,185 1,813 1,650 1,486 1,705 2,306 1,402 1,512 1,634 60.0 50.0 1,481 40.0 30.0 1,000 500 0 20.0 10.0 0.0

(` cr)

1,500

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

EBIT (LHS)
Source: Company, Angel Research

EBIT margins (RHS)

July 27, 2013

1QFY14

(%)

Sterlite Industries | 1QFY2014 Result Update

Investment rationale
Zinc-Lead expansion to aid growth: Sterlites subsidiary, Hindustan Zinc (HZL) has commenced work at its underground Kayar mine, which has 11mn tonne of highgrade reserves (10-12% zinc content). The company expects to increase its capacity from 1.0mn tonne to 1.2mn tonne. Moreover, given the cash-rich balance sheet, HZL is actively exploring greenfield projects through prospecting licenses and mining lease projects across different states. Ban on Sesa Goas mines in Goa remains a concern: During 2QFY2013, the Goa government had imposed a ban on iron ore mining in Goa until further review. Later, the Ministry of Environment and Forest Clearances (MOEF) also suspended environment clearances to all functional mining leases in Goa. Sesa Goa operated 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 Sesas 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 FY2014-15. 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, the valuation of Sterlite will mirror the valuation of the consolidated company - Sesa Sterlite. We value Sterlite at `97, based on the SOTP methodology and recommend Accumulate rating on the stock.

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 4.0 595 72,847 Target multiple (x) 6.0 6.0 6.0 4.0 1.0 2.0 5.0 Equity value 9,691 2,708 (4,794) 58,968 472 2,018 7,333 % Stake 100% 51% 100% 65% 100% 100% 100% 100% 100% 59% Value 9,691 1,381 (4,794) 30,616 472 2,018 7,333 1,712 595 34,267 (28,797) 54,495 162 97

July 27, 2013

Sterlite Industries | 1QFY2014 Result Update

Exhibit 7: EPS Angel forecast vs consensus

Year (%) FY2014E FY2015E
Source: Angel Research

Angel forecast 16.8 19.2

Bloomberg consensus

Variation (%) (7.0) (4.4)

18.1 20.1

Exhibit 8: EV/EBITDA band

120,000 100,000 80,000

(` cr)

60,000 40,000 20,000 0 Jun-09

Jan-10 2.0x

Aug-10 4.0x

Mar-11

Oct-11 6.0x

May-12 8.0x

Dec-12

Jul-13

10.0x

Source: Bloomberg, Angel Research

Exhibit 9: P/E band

350 300 250

(` )

200 150 100 50 0 Apr-09 Sep-09 Feb-10 Jul-10 Dec-10May-11 Oct-11 Mar-12 Aug-12 Jan-13 Jun-13 4.0x 8.0x 12.0x 16.0x

Source: Bloomberg, Angel Research

July 27, 2013

Sterlite Industries | 1QFY2014 Result Update

Exhibit 10: P/BV band

400 350 300 250 200 150 100 50 0 Apr-09 Sep-09 Feb-10 Jul-10 Dec-10May-11 Oct-11 Mar-12 Aug-12 Jan-13 Jun-13 0.5x
Source: Bloomberg, Angel Research

(` )

1.0x

1.5x

2.0x

Exhibit 11: Recommendation summary

Company Hindalco Nalco Sterlite HZL CMP (`) 94 29
77

TP (`)

Reco.

Mcap Upside (` cr) 7,525

25,743

P/E (x) FY14E 7.2 11.4

4.6

P/BV (x) FY15E 0.5 0.6

0.4 1.0

EV/EBITDA (x) FY14E 6.3 3.2

1.9 2.7

RoE (%) 5.6 3.2

1.5 1.7

RoCE (%) 7.5 5.5 5.4 3.4

8.1 15.2

(%) 26

FY15E FY14E 6.4 11.1

4.0

FY15E FY14E FY15E FY14E FY15E 7.2 5.4

10.5 18.5

- Neutral 18,112 32 Neutral

97 Buy

0.5 0.6
0.5 1.2

5.5 3.5
8.2 15.0

10.9 17.9

103

140

Buy

43,563

35

6.8

6.1

Source: Angel Research

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) which has a 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 100% stake in Namibian Skorpian Mines (Skorpian) 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 Goas and Sterlites promoters) announced a plan to merge Sesa Goa with Sterlite. The merger has been approved by the shareholders of both the companies and is currently awaiting various court approvals.

July 27, 2013

Sterlite Industries | 1QFY2014 Result Update

Profit & Loss Statement (Consolidated)

Y/E March (` cr) Total operating income % chg Total Expenditure Net Raw Materials Other Mfg costs Personnel EBITDA % chg (% of Net Sales) Depreciation & Amortization EBIT % chg (% of Net Sales) Interest & other Charges Other Income (% of PBT) 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

FY2010 FY2011 FY2012 FY2013 FY2014E FY2015E 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) 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 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 5,200 2.2 12.6 14.4 15.5 8.0 45,162 9.7 34,693 20,940 11,873 1,880 10,469 6.1 23.2 2,032 8,437 5.0 18.7 922 3,453 31.5 10,968 6.0 (101) 10,867 1,618 14.9 9,249 (660) 2,529 6,060 6,146 18.2 13.6 18.3 18.3 18.2 44,493 (1.5) 34,539 21,446 11,225 1,869 9,954 (4.9) 22.4 2,431 7,523 (10.8) 16.9 1,298 3,826 38.1 10,051 (8.4) 10,051 1,508 15.0 8,543 (490) 2,392 5,661 5,661 (7.9) 12.7 16.8 16.8 (7.9) 45,599 2.5 34,688 21,979 10,794 1,915 10,911 9.6 23.9 2,568 8,343 10.9 18.3 1,331 3,876 35.6 10,888 8.3 10,888 1,633 15.0 9,255 (386) 2,406 6,463 6,463 14.2 14.2 19.2 19.2 14.2

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

July 27, 2013

Sterlite Industries | 1QFY2014 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 adv. 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 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 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 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 43,726 13,787 29,939 10,092 17,623 43,442 7,663 35,291 17,697 9,964 7,178 8,884 26,407 0.0 89,172 51,726 16,218 35,508 8,092 17,623 43,442 7,663 39,596 22,109 9,964 7,071 8,868 30,729 0.0 59,726 18,786 40,940 6,092 17,623 43,442 7,663 44,794 27,130 9,964 7,247 8,884 35,910 0.0 168 36,844 37,012 8,410 9,260 1,552 56,234 336 41,099 41,435 10,291 10,948 2,179 3,530 8,299 66,036 336 45,720 46,056 12,199 14,473 2,208 5,728 8,930 76,401 336 50,961 51,297 14,728 19,473 2,208 5,728 8,930 89,172 336 55,960 56,296 17,120 19,973 2,208 5,728 8,930 336 61,666 62,002 19,526 20,473 2,208 5,728 8,930 FY2010 FY2011 FY2012 FY2013 FY2014E FY2015E

97,062 105,675

97,062 105,675

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

July 27, 2013

10

Sterlite Industries | 1QFY2014 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 adv. 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

FY2010 FY2011 FY2012 FY2013 FY2014E FY2015E 6,460 750 (7,316) 1,233 (2,822) (6,898) (4,098.3) 9,133 1,030 (319) 1,735 (285) 7,585 5,349 7,553 9,872 10,867 1,830 2,032 1,618 (660) 9,562 5,000 (904) 4,096 9,158 8,539 552 (1,059) 2,383 (772) 8,400 805 10,051 2,431 90 1,508 (490) 10,574 (6,000) (6,000) 500 (662) (162) 4,411 17,697 22,109 10,888 2,568 (160) 1,633 (386) 11,278 (6,000) (6,000) 500 (756) (256) 5,022 22,109 27,130

(1,483) (3,708) (5,464)

7,396 (4,500)

- (9,696) (1,320) 7,653 2,246 449 (2,201) 11,651 (2,167) 5,505 3,338 2,563 3,046

(10,996) (7,492) (9,522) (4,500)

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

8,539 17,697

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

July 27, 2013

11

Sterlite Industries | 1QFY2014 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) WC cycle (ex-cash) (days) Solvency ratios (x) Net debt to equity Net debt to EBITDA Interest Coverage (EBIT / Int.)
comparable with previous year ratios

FY2010 FY2011 FY2012 FY2013 6.5 5.5 0.7 1.7 0.8 3.2 0.4 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 11 53 83 0.1 0.7 19.6 5.4 4.2 0.6 2.3 0.7 2.6 0.3 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 13 52 105 0.0 0.1 20.0 5.0 3.7 0.6 3.1 0.5 2.2 0.3 14.4 15.5 20.9 2.4 137.0 19.5 78.6 0.7 11.3 5.3 0.1 11.9 11.3 15.7 11.9 1.2 43 15 39 71 0.1 0.4 9.4 4.2 3.2 0.5 3.5 0.5 2.0 0.2 18.3 18.3 24.3 2.7 152.6 18.7 85.1 0.7 11.7 11.7 10.2 14.4 12.6 1.1 43 15 39 66 (0.0) (0.1) 9.1

FY2014E 4.6 3.2 0.5 2.6 0.4 1.9 0.2 16.8 16.8 24.1 2.0 167.5 16.9 85.0 0.7 9.6 9.6 8.1 11.7 10.5 0.9 43 15 39 71 (0.0) (0.2) 5.8

FY2015E 4.0 2.9 0.4 2.9 0.4 1.5 0.2 19.2 19.2 26.9 2.2 184.4 18.3 85.0 0.6 9.8 9.8 8.2 12.0 10.9 0.8 43 15 39 70 (0.1) (0.6) 6.3

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

July 27, 2013

12

Sterlite Industries | 1QFY2014 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%)

July 27, 2013

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