Shares of Sterlite Technologies gained nearly 4 per cent in early trade despite the firm reporting a 58 per cent fall in profit for the quarter ended September 2022. Sentiment around the stock was positive with the firm logging a robust 320 per cent rise compared to a loss of Rs 20 crore for the quarter ended June 2022. Also, the MNC tech company has posted profit after three consecutive quarters of losses, which led to a rally in the stock today.
The firm reported a profit of Rs 44 crore in Q2 against a profit of Rs 105 crore for the quarter ended September 2021. However, sales climbed 17.24 per cent to Rs 1768 crore in the quarter ended September as against Rs 1,508 crore during the previous quarter ended September 2021. On the other hand, sales grew 12.25 per cent from Rs 1,575 crore in the June quarter.
Buoyed by the sequential rise in sales and profit, Sterlite Technologies stock gained 3.74 per cent to an intraday high of Rs 170.8 on BSE.
Sterlite Technologies stock has been rising for two sessions. The shares are trading higher than the 5 day and 100 day moving averages but lower than 20 day, 50 day and 200 day moving averages.
Sterlite Technologies shares have lost 39.41 per cent in 2022 and declined 44.5 per cent in a year. Market cap of the firm rose to Rs 6,689 crore in today's trade. Total 0.94 lakh shares of the firm changed hands amounting to a turnover of Rs 1.57 crore on BSE. At 11:09 am, the stock was trading 2 per cent higher at Rs 167.95 against the previous close of Rs 164.65 on BSE.
YES Securities has maintained a buy call on the stock with a target price of Rs 210, a 27 percent upside to the current market price of Rs 165.
"We expect EBITDA margin to improve going ahead led by easing off certain cost pressure related to raw material and logistics. It has been able to pass some increase in cost to customers. The moderation in capex intensity will help to keep debt under control. We estimate revenue CAGR of 20.1% over FY22-24E with average EBITDA margin of 14.2%. We maintain our BUY rating on the stock with target price of Rs 210/share based on EV/EBITDA of 8x on FY24E. The stock trades at EV/EBITDA of 10.7x/6.7x on FY23E/FY24E," said the brokerage.
Sterlite Technologies is engaged in the business of connectivity and network solutions. The company designs and deploys high-capacity converged fiber cables and wireless networks.
Also Read: Macrotech Developers shares down 38% from 52-week high; good time to buy?
Also Read: Bank of Baroda shares rally 12% to hit fresh 52-week high. More gains ahead?