ICICI Direct Bullish On Telecommunications Sector Midcap Stock, Buy For 32% Gains

Telecommunication sector firm Sterlite Technologies Ltd. (STL) to buy as ICICI Direct recommends Buy the stock for a target price of Rs. 200 apiece. Considering the assigned target price and the current market price, the stock has the potential to give 32% return. This is a midcap stock with a market capitalisation of Rs. 6,080.34 crore.

Q4FY23

According to ICICI Direct, Recovery continued with product segment driving profitability. Revenues came in at Rs. 1872 crore, up 18.3% YoY, driven by product segment. The product segment grew 40% YoY to Rs. 1486 crore while services declined ~24% YoY to Rs. 382 crore. EBITDA at Rs. 256 crore, was up 1.8x YoY, with margins at 13.7% (up 790 bps YoY, 76 bps QoQ) largely in line with expectations, driven by revenues mix as product segment has superior margins. Product had a margin of 20.3% vs. ~20.3% in Q3. PAT of Rs. 65 crore vs. loss in base quarter. Adjusted PAT was Rs. 82 crore.

Buy for a target price of Rs. 200 apiece

According to ICICI Direct, STL share price has grown ~19% over last five years. STL is uniquely positioned to benefit from 5G/ FTTH deployment cycle both domestically and globally. "The company will likely see healthy earnings momentum in the medium term ahead (notwithstanding muted H1FY24) ahead. Thus, we maintain BUY rating on the stock. We value STL at Rs. 200, at 15x FY25 P/E," the brokerage has said.

Stock's Market Price, 52-Week High/Low, & Returns

The current market price of the stock is Rs. 152.55 apiece, down 2.56% from its previous close of Rs. 156.55 apiece. Its 52 week high is Rs. 193 apiece and 52-week low is Rs. 128.60 apiece, respectively.

The stock has continuously fallen in the past 1 year. It falls 6.75% in 1 week, 3.33% in 1 month and 8.24% in 3 months, respectively. It has fallen 9.57% in 1 year. In the past 3 years, it has fallen 55.66% positive return. In 5 years, it declined by 50.76%.

About - Sterlite Technologies Ltd. (STL)

Sterlite Technologies (STL) is a leading telecommunication infrastructure player with offerings in optical fibre (OF) and optical fibre cables (OFC), hyper-scale network design and deployment & network software.

Disclaimer - The stock has been picked from the brokerage report of ICICI Direct. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.