Edelweiss maintains buy on Sterlite Tech, target price Rs 296

Edelweiss has maintained buy rating on Sterlite Technologies in the long term with a target price of Rs 296. The stock ended up 3.4% at Rs 161.40 on Thursday while the BSE Sensex closed 396.22 points up at 38,989.74.

Company Financials

For the quarter ended 30-06-2019, the company has reported consolidated sales of Rs 1431.99 crore, down -20.05 % from last quarter sales of Rs 1791.16 crore and up 63.30 % from last year same quarter sales of Rs 876.89 crore. The company has reported net profit after tax of Rs 142.87 crore in the latest quarter.


Investment Rationale

Acquisition of 80% stake in IDS Group will help Sterlite build capabilities in the fast growing data centre design space, which it can cross-sell, and will be EPS-accretive from the first year itself, the brokerage said. Edelweiss believes the acquisition’s success hinges on institutionalisation of know-how and retention of top management.