Post on 06-Apr-2018
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STERLITE INDUSTRIESSTERLITE INDUSTRIES(INDIA) Ltd.(INDIA) Ltd.
(Copper Unit)(Copper Unit)
COMPANY REVIEW SESSION
Presented By
DeepshikhaNighat Fatima HussainHemant Kumar Kabra
Subrat Kumar Mohanty
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COMPANY PROFILECOMPANY PROFILE
SIIL is the principal subsidiary of Vedanta Resources Plc, adiversified & integrated FTSE 100 metals & mining company,located in India & Australia.
Indias largest non-ferrous metals & mining company and are oneof the fastest growing private sector companies.
Listed on BSE & NSE in India and 1 st Indian metals company
listed in NYSE .
Sterlite develops & manages a diverse portfolio of mining &metals businesses to provide returns to its shareholders and creatingvalue for the communities where it operates.
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G ROUP STRUCTUREG ROUP STRUCTURE
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MANA G EMENT
Chairman : Mr. Anil Agarwal
Executive Vice-Chairman : Mr. Navin Agarwal
Non Executive Director : Mr. Berjis Minoo Doshi
Mr. Gautam Bhailal Doshi
Mr. Sandeep H. Junnarkar
Chief Executive Officer : Mr. Mahendra Singh Mehta
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HISTORY OF THE COMPANY
Incorporated on September 08, 1975 as Rainbow Investments Limited inCalcutta (now know as Kolkata).R egistered Office shifted from Calcutta to Bombay (Mumbai) in the year 1979
1986: Sterlite Cables Limited, acquires the Shamsher Sterling Corporation, changes
the name to Sterlite Industries ( India) Limited.
1988: Sterlite Industries makes an initial public offering of its shares on the Indian
stock exchange
1991: Sterlite Industries establishes Indias first continuous copper rod plant
1997: Commissions first privately developed copper smelter in India at Tuticorin in
Tamil Nadu.
1999: Acquires Copper Mines of Tasmania Pty Ltd. & Thalanga Copper Mines Pty Ltd.2005: Expansion of Tuticorin Smelter to 300,000 TPA2006: Expansion on Tuticorin smelter to 400 KTPA through innovativedebottlenecking.
2007: Sterlite Industries primary listing on NYSE in June 2007
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VISION & MISSION
To be the worlds largest leading copper producer delivering sustainable value to all
stakeholders by leveraging technology and best practices by 2015.
To build a knowledge and process driven organization through TPM
To create sustainable value through safe, clean and green processes
To sustain leadership position in domestic and global market through
market development and customer delight.
To be the best and most respectable corporate citizen
To leverage technology to its full potential across the business cycle
To harness the profitable and growing CCR/value added product from
240KMT to 600 KMT per annum
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PRODUCTS PROFILE:PRODUCTS PROFILE:
Main productions are : Copper cathodeMain productions are : Copper cathodeContinuous cast rods (CCR)Continuous cast rods (CCR)
BY PRODUCTS :BY PRODUCTS :
Sulphuric AcidSulphuric Acid Phosphoric AcidPhosphoric Acid Hydrofluoro siliciHydrofluoro silici GypsumGypsum
Ferro sandFerro sand SlimeSlime
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AWARDS AND RECO G NITIONSAWARDS AND RECO G NITIONS2005
British Safety Councils Safety Award. Sterlite Featured in "Best Companies to work for in India": Business Today Survey
2006 G reentech Environment Excellence Award. CII National Award for Excellence in Energy Management.
2007 CII National Award for Excellence in Energy Mgmt for both Tuticorin
& Silvassa operations G reentech Environment Excellence Award 2007 CII HR Excellence Award, Commendation Certificate.
2008 CII, Energy Efficient Unit, 2008 CII Water Efficient Unit Award, Excellent Water Efficient unit, 2008 CII-ITC Sustainability Award, Certificate of Commendation for Strong Commitment to excel
2009 IT Department of Sterlite achieves ISO 27001 certification.
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CORPORATE SOCIAL RESPONSIBILITY
SterliteSterlite IndustriesIndustries R edR ed R ibbonR ibbon Club,Club, inin associationassociation withwith GovernmentGovernment BloodBlood Bank,Bank,
organizedorganized aa BloodBlood DonationDonation CampCamp..
ConstructedConstructed undergroundunderground drinkingdrinking waterwater sumpsump inin aa villagevillage atat aa costcost of of 22..1010 lakhslakhs
withwith waterwater holdingholding capacitycapacity of of 3030,,000000 litersliters..
SterliteSterlite initiativesinitiatives havehave helpedhelped thethe womenwomen toto havehave accessaccess toto workingworking capitalcapital andand
trainingtraining..
SterliteSterlite IndustriesIndustries LtdLtd.. launchedlaunched thethe CoastalCoastal LivelihoodLivelihood ProjectProject toto promotepromote
technicaltechnical skillsskills amongamong coastalcoastal youthyouth inin TuticorinTuticorin. .
ActivitiesActivities likelike treetree plantation,plantation, healthhealth camps,camps, sponsoringsponsoring childchild birthdaybirthday areare somesome of of
thethe eventsevents wherewhere employeesemployees havehave activelyactively participated,participated, etcetc..
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HRHR StrategyStrategy
Get Nurture and GrowGet Nurture and Grow
Skill & DevelopmentSkill & Development
Knowledge managementKnowledge management
Leadership DevelopmentLeadership Development
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G EO G RAPHICAL SE G MENTATION:G EO G RAPHICAL SE G MENTATION:
STERLITE INDUSTRIES (INDIA) LTD
R EFINER IESIN
FUJA IRAHUAE
PLANTSIN
TUT ICORINTUT ICORINTAM ILN ADUTAM ILN ADU
SO UTH IN D IASO UTH IN D IA
COPPE R MINEIN
TA SMA NI AAU ST RA LIA
R EFINERYIN
SILV A SS A
U NION TE RRI T ORYO F DAD RA
WE STE RN IN D IA
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STRATE G IC MANA G EMENTSTRATE G IC MANA G EMENT
DoubleDouble thethe coppercopper smeltingsmelting capacitycapacity toto meetmeet growinggrowing
regionalregional demanddemand
ContinueContinue toto retainretain andand furtherfurther sharpensharpen costcost efficiencyefficiency
CommissionCommission captivecaptive powerpower plantplant andand continuecontinue toto drivedrive
operationaloperational excellenceexcellence initiativesinitiatives
IncreasingIncreasing capacitiescapacities throughthrough GreenfieldGreenfield andand
BrownfieldBrownfield projectsprojects..
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LeveragingLeveraging our our projectproject executionexecution andand operatingoperating skillsskills andand
experienceexperience inin buildingbuilding andand operatingoperating captivecaptive power power plantsplants toto developdevelopaa commercialcommercial power power generationgeneration businessbusiness. .
ContinuingContinuing toto focusfocus onon assetasset optimizationoptimization andand reducingreducing thethe costcost of of
productionproduction. .
SeekingSeeking further further growthgrowth andand acquisitionacquisition opportunitiesopportunities thatthat leverageleverage
transactional,transactional, projectproject executionexecution andand operationaloperational skillsskills..
ConsolidatingConsolidating corporatecorporate structurestructure andand increasingincreasing directdirect ownershipownership
of of underlyingunderlying businessesbusinesses to to derivederive additionaladditional synergiessynergies asas anan
integratedintegrated groupgroup
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STUDY BASED ON MICHAEL PORTERMODEL:
SUPPLIERPOWER
THREAT OF NEW
ENTRANTS
THREAT OF SUBSTITUTES
BUYERPOWER
DE G REE OF RIVALRY
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THREATTHREAT OF NEW ENTRANTS:OF NEW ENTRANTS:
Capital requirement is highCapital requirement is high
Issues relating to the setup of mining industry are moreIssues relating to the setup of mining industry are more
Stringent rules by GOVT has been setup in case ofStringent rules by GOVT has been setup in case of
mining industrymining industry
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SUPPLIER POWER:SUPPLIER POWER:
11% of raw material is from its mining activity and the11% of raw material is from its mining activity and the
remaining is importedremaining is imported
It mostly deals with the forward contractIt mostly deals with the forward contract
Spot market is reduced thus eventually reducing per unSpot market is reduced thus eventually reducing per un
Cost.Cost.
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Major supplier in terms of copper supply in IndiaMajor supplier in terms of copper supply in India
Spreading globally by developing mines out side homeSpreading globally by developing mines out side home
countrycountry
76% of power sector is included in the customer list of76% of power sector is included in the customer list of
the companythe company
Global presenceGlobal presence
BUYER POWER:
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THREATTHREAT OF SUBSTITUTES:OF SUBSTITUTES: Import of electrical goods is to an large extent substituting the
copper supply. In case of increasing cost, aluminum might be taken as substitute to
switch the cost.
DE G REE OF DE G REE OF RIVALRY:RIVALRY: Main competitors
Hindustan copperHindalco copper
Major supplier for power sector & telecom industry Brand image Cost determination Capacity
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11,822.41 12,673.58 11,548.3813,114.88
15,292.57
0.00
2,000.00
4,000.00
6,000.00
8,000.00
10,000.00
12,000.00
14,000.00
16,000.0018,000.00
2007 2008 2009 2010 2011
(R S. IN C RO R E)
Years
S a
l e s
i n c r o r e
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0
200
400
600
800
1000
1200
1400
1600
2007 2008 2009 2010 2011
784.03784.03
951.63951.63
1,236.431,236.43
831.5831.5
1,419.711,419.71
(R S. IN C RO R E)
Years
P r o
f i t a
f t e r
t a x
i n c r o r e
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0.00
2.00
4.00
6.00
8.00
10.00
12.00
2007 2008 2009 2010 2011
6.63
7.51
10.71
6.34
9.28
M a r g
i n s
i n %
Years
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6.45
5.94
8.98
7.02
5.16
0
1
2
3
4
5
6
7
8
9
10
2007 2008 2009 2010 2011
Years
I n v e n
t o r y
T u r n o v e r
R a
t i o
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0
510
15
20
25
30
20072008
20092010
2011
2007 2008 2009 2010 2011Series1 15.87 14.52 17 28.76 25.85
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0
0.5
1
1.5
2
20072008
20092010
2011
T o
t a l A s s e t s
T u r n o v e r
R a
t i o
2007 2008 2009 2010 2011Series1 1.63 0.77 0.65 0.48 0.53
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20072008
20092010
2011
1.96
2.77
1.53 1.67
1.11
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0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
2007 2008 2009 2010 2011
0.63
0.25 0.27 0.24 0.25
Years
D e
b t e q u
i t y R a
t i o
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0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
2007 2008 2009 2010 2011
5.96
7.63 7.54
4.68
7.84
I n t e r e s t
C o v e r a
g e
R a
t i o
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02468
1012141618
20072008
20092010 2011
2007 2008 2009 2010 2011Series1 17.59 7.23 8.8 3.73 6.11
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Indian Promoters, 3.08%
Foreign Promoters,54.64 %
Banks, F I, InsuranceCompanies , 5.14 %
Foreign InstitutionalInvestors (F IIs), 13.23 %
Mutual F unds (includingUT I), 3.5 %
Private CorporateBodies, 5.72 %
Indian Public, 3.91 %
NRIs / OCBs,
0.16 %
Shares held bycustodians, 8.08 %
Clearing Member, 0.08 %Trusts, 2.14 %
Foreign Bodies D R,0.33%
SHARE HOLDIN G PATTERNSHARE HOLDIN G PATTERN
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14.0414.0413.4313.43
17.4517.45
9.899.89
4.224.22
0
2
4
6
8
10
12
14
16
18
20
2006-07 2007-08 2008-09 2009-10 2010-11
EPSEPS
Years
E a r n
i n g p
e r
S h
a r e
i n
R s
.
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D ividendPaid
Splittingof shares
Bonus
INDEX
RightIssue
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Sterlite Hind Copper Hindalco
LTP (17/8/2011) 134.35 225.25 142.75% change 1.95 (1.47%) -5.25 (-2.28%) -1.60 (-1.11%)
5 2-week High/Low 195.90 / 130.00 485.40 / 230.00 251.90 / 140.60
Results (in cr.) As on Mar 11
Sales 15,310.29 1,146.52 23,859.21
PAT 1,419.71 224.1 2,136.92Market Cap. 44956.15 21622.34 27328.34
Ratios
Operating profit Margin% 15.05 31.27 14.68Net operating margin% 9.27 19.55 8.96
EPS 4.22 2.42 11.17
Bonus and Dividends
2011 1.1 0.5 1.502010 3.75 / BONUS 1:1 0.5 1.352009 3.5 -- 1.352008 4 -- 1.85
2007 -- -- 1.70
PEER ANALYSISPEER ANALYSIS
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FUTURE OUTLOOKFUTURE OUTLOOK
StrongStrong demanddemand of of copper copper inin thethe worldworld andand inin IndiaIndia..
7676 %% of of totaltotal salessales isis toto power power sector sector onlyonly..
ByBy--productsproducts areare alsoalso helpfulhelpful inin increasingincreasing EBITDAEBITDA
IncreasingIncreasing capacitycapacity of of bothboth smelter smelter andand miningmining activityactivity..
Power Sector
42%
Construction28%
IndustriesMachinary
9%
T ransportation
12%
T elecommunication
9%
U se of Copper
ExpandingExpanding thethe capacitycapacity ofof TuticorinTuticorin planplanConstructionConstruction ofof 160160 MWMW captivecaptive powerpower plantplant..
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Various legal issues faced by the company:
1. E nvironmental & pollution related issues.
2. Forest Clearance issues.
3. Tax related cases pending in court .
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