MUMBAI Indian non-ferrous metals producer Sterlite Industries on Monday surprised the market with a bonus share issue and a stock split, sending its shares soaring by their highest in more than two months.
Sterlite, a unit of London-listed Vedanta Resources also beat market forecasts as quarterly net profit more than doubled on the back of strong sales as prices and volumes moved up.
"The bonus and stock split is definitely a surprise. But it has been overdue--they have a very strong balance sheet," said Ajay Parmar, head of research for institutional equities at Mumbai brokerage Emkay Global.
Sterlite said on Monday its board had approved a 1-for-1 bonus share issue and a 2-for-1 stock split.
Shares in the company, valued at $15 billion, rose to 842.50 rupees, up 5.95 percent--its biggest gain since Feb 3, in a Mumbai market that rose 0.3 percent.
The stock has slipped 2.2 percent so far in 2010, compared to a 1.6 percent rise in the main index.
Sterlite, which produces aluminium, copper, zinc and lead, reported March quarter net profit jumped to 13.81 billion rupees from 5.98 billion a year ago. Net sales rose to 71.11 billion, from 43.4 billion a year ago.
A Reuters poll of 13 brokerages had forecast Sterlite's quarterly net profit at 11.5 billion rupees, on net sales of 55.8 billion rupees.
Its aluminium segment saw a turnaround, reporting a profit compared with a loss last year. The zinc and lead segment, which contributes a third of turnover, saw profits surge as prices nearly doubled from a year ago.
(Reporting by Prashant Mehra; Editing by Surojit Gupta)
(For more business news on Reuters Money visit www.reutersmoney.in)
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