Disruptive Investor
Long/short equity, deep value, event-driven, macro

Sterlite: A Strong Buy At Compelling Valuations

Before discussing the key factors for believing that Sterlite Industries (SLT) can double from current levels, I would like to list down some key operating and valuation metrics for the company compared to the industry average.

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Besides these key metrics, Sterlite is also trading at just 0.57 times its book value and at 2.16 times the EV/EBITDA (EV calculated on June 7, 2013). Considering these metrics, there is no doubt that Sterlite is trading at cheap valuations. A more important analysis is the reason for trading at current valuations and the probability of trading at fair value in the foreseeable future.

Reason For Cheap Valuations

Closure of the Copper Smelter

On March 29, 2013, Sterlite's Tuticorin copper...

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