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Sterlite Optical dips despite 101% net profit rise

NetScribes/Abhijit Basu

Sterlite Optical Technologies fell 5.32 per cent to Rs 830.10 on the BSE on Monday even as its December quarter net profit more than doubled to Rs 894.60 million. Marketmen attributed the fall partly to the general bearish sentiment in the market as the results had already been factored into the company's current valuation.

Jardine Fleming Research had predicted the company's net profit at Rs 650 million for the December quarter. "The scrip was anyway rising for the last few days and this is only a correction happening. The results are in line with our expectations," said a senior analyst with Asit C Mehta Brokerage.

However, there were others who felt that the net profit fell short of market expectations. "The market had expected the net profit to go up to Rs 1 billion. This, along with the correction on the scrip, has caused the dip," said Bhaskar Kapadia, research head at ULJK Securities.

Backed by a whopping increase in export revenues, the company reported a 101 per cent jump in net profit to Rs 894.60 million for from Rs.445.20 million for the corresponding period last year. The company's exports grew manifold to Rs 1230.50 million for the quarter from Rs 18.20 million a year ago.

Net sales increased 40.49 per cent to Rs 3222.20 million, while the non-operating income grew more than threefold to Rs 39.20 million.

According to the company, sales of optical fibre and optical fibre cables accounted for 62 per cent of total sales during the quarter. The figure stood at 30 per cent in the corresponding quarter last year.

"Globally, the price of optical fibre has gone up to $50-60 per fibre kilometre from $25 per fibre kilometre last year. Sterlite Optical sells its wares at around $50-55 per fibre kilometre owing to long-term contracts with large telecommunications and Internet players globally. So, the company makes more money on volumes," said the Asit C Mehta Brokerage analyst.

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