INDIA Institutional Research Cables & Conductors Sterlite Technologies Ltd Lightning technology connecting growth… Initiating Coverage Analyst: Backward integration ‐ a unique advantage: Sterlite Rating Buy Kanika Bihany Dugar Technologies Ltd (STL) is the solo integrated optical fiber Target Price Rs640
[email protected] manufacturer in India. The process of converting silicon CMP* Rs360 91 22 3951 7618 into glass and further to fiber helps the company to realize Date: 8th January 2010 Upside 77% 35‐40% OPMs only from this integration; in addition to 14‐ Sensex 17615 15% OPMs from manufacturing of fiber‐optic cables from the optical fibers. Golden goose ‐ Optical fiber and fiber‐optic cables: The Key Data company is currently the 5th largest manufacturer of Bloomberg Code SOTL IN Equity optical fiber and fiber‐optic cables globally and is moving rd Reuters Code STTE.BO towards 3 largest globally with increasing its capacity to 20mn Km for optical fiber and 10mn FKm for fiber optic NSE Code STRTECH cables by FY12E. This will assist the company to capture Current Share o/s (mn) 64.6 10% global market share from the current 5%. MktCap (Rsbn/USDmn) 23.5/510 Enduring growth in conductors backed by continuing 52 Wk H/L (Rs) 383.9/44.2 investments in T&D sector: The power conductor business Daily Vol. (3m NSE Avg) 255881 segment, contributing 63% to net sales in FY09, will Face Value (Rs) 5 maintain the growth trajectory with investments of about Beta 1.44 Rs315bn in conductors segment alone in the XIth plan out 1USD/INR 45.7 of total investments of Rs4.3tn on power T&D.