Maybank Kim Eng Securities maintains buy on Sterlite Technologies, target price Rs 190

Maybank Kim Eng Securities has maintained its buy rating on Sterlite Technologies in the long term with a target price of Rs 190 citing attractive valuations. The stock gained 7.3% to close at Rs 134 on Friday while the BSE Sensesex closed 12.81 points (0.03%) up at 41,945.37.

Company Financials

For the quarter ended 31-12-2019, the company has reported consolidated sales of Rs 1202.66 crore, down -11.55% from last quarter sales of Rs 1359.69 crore and down -9.90% from last year same quarter sales of Rs 1334.87 crore. The company has reported net profit after tax of Rs 49.99 crore in the latest quarter.

The company’s top management includes Dr.Anand Agarwal, Mr.A R Narayanaswamy, Mr.Anil Agarwal, Mr.Arun Todarwal, Mr.Pratik Agarwal, Mr.Pravin Agarwal, Mr.Sandip Das, Ms.Kumud Srinivasan. Company has Price Waterhouse Chartered Accountants LLP as its auditors. As on 31-12-2019, the company has a total of 403,880,217 shares outstanding.

Investment Rationale

The systems integration business is holding up while the products business should turnaround soon as US-China trade talks are making progress and 5G launches are picking up globally, it said. Though the brokerage cut its FY20-22 estimated EPS by 4-14%, the stock is trading at an attractive valuation of 8.3 times FY21 estimated earnings, it said.