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Sterlite Industries First-Quarter Profit Rises 50% (Update3)
Jul 27,2010 08:57CST
industry news

MUMBAI, July 27 -- Sterlite Industries (India) Ltd., owner of the nation's biggest zinc producer, reported first- quarter profit rose 50 percent after a gain in metal prices.

Net income climbed to 10.1 billion rupees ($215 million), or 2.83 rupees a share, in the three months ended June 30 from 6.72 billion rupees, or 2.37 rupees, a year earlier, according to a statement to the Bombay Stock Exchange. The average estimate of 22 analysts complied by Bloomberg was 11.8 billion rupees. Sales rose 29 percent to 59.2 billion rupees.

Sterlite, part of London-based Vedanta Resources Plc, owns Hindustan Zinc Ltd., which reported a 24 percent gain in first- quarter profit on July 24. Prices of zinc, used to rust-proof steel, averaged 37 percent higher in the quarter in London, rebounding from a year-earlier slump caused by the global recession.

"Metal prices -- copper, aluminum, zinc -- all were up," said Paresh Jain, an analyst at Angel Broking Ltd. in Mumbai. Still, "the results are on the lower end of expectations," he said.

Sterlite fell 0.1 percent to 173.85 rupees at the close of trade in Mumbai. The stock has fallen 19.5 percent this year, compared with a 3.2 percent advance in India's benchmark Sensitive Index, or Sensex.

Sterlite, also India's largest copper producer, benefited from prices that averaged 50 percent higher in London during the quarter. The company has obtained a court order adjourning a tax demand of 3.24 billion rupees from the excise department, according to the statement.

The company had a good start to the year and the first quarter was "strong," Vice Chairman Navin Agarwal said on a call with analysts and reporters. Zinc has "strong fundamentals," he said, without elaborating.

Hindustan Zinc reported net income rose to 8.91 billion rupees, or 21.09 rupees a share, in the three months ended June 30 from 7.19 billion rupees, or 17.01 rupees, a year ago.



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