Sterlite Industries Net Rises on Copper, Zinc Prices

MUMBAI, Apr. 27 -- Sterlite Industries (India) Ltd., owner of the nation's biggest zinc producer, more than doubled its fourth-quarter profit on higher prices and said it will give investors a free share for each held.

Net income rose to 13.8 billion rupees ($311 million), or 15.34 rupees a share, in the three months ended March 31, from 5.98 billion rupees, or 8.44 rupees, a year earlier, according to a Bombay Stock Exchange statement. The median estimate of 23 analysts was 11.1 billion rupees. Sales rose 64 percent to 71.1 billion rupees.

Rising demand for steel that goes into air conditioners and cars is boosting sales of zinc, used to rust-proof the alloy. Sterlite, part of London-based Vedanta Resources Plc, owns Hindustan Zinc Ltd. The unit last month started production from a 210,000 metric-ton capacity smelter in the western state of Rajasthan, a quarter ahead of schedule.

"We expect a higher contribution from the zinc business with the expanded capacity now in place," said Sumeet Singhania, who has a "buy" rating for the stock at Antique Stock Broking Ltd. in Mumbai.

Splitting Shares

Sterlite said today it will split each of its shares into two. The Mumbai-based company's stock rose 6 percent to 842.60 rupees at the close of trading in Mumbai. The key Sensitive Index of the Bombay Stock Exchange rose 0.3 percent.

Revenue from the zinc and lead businesses doubled, while copper sales rose 68 percent, Sterlite said. Raw material costs during the quarter rose 38 percent.

"The cost during this period was largely impacted by excess credit and the fact that royalty also underwent change which is linked with the LME price," Mahendra Singh Mehta, chief executive officer, Sterlite, said in a conference call.

Zinc prices for three-month delivery averaged $2,307 a metric ton in the quarter ended March 31, compared with $1,208 a year earlier, according to London Metal Exchange data.

Sterlite, India's biggest copper producer, also benefited from rising prices of the metal used in appliances such as refrigerators. The average LME price of copper more than doubled in the March quarter, according to the data.