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The stock market pegged up the Sterlite Industries stock by about 4.4 per cent on Monday, after the company reported better-than-expected results.
The company's 65 per cent controlling stake in Hindustan Zinc paid off handsomely, as higher zinc prices and the silver output from its mines lifted its profits. Improved TCRC charges (concentrate treatment and refining charges) also helped.
Sterlite Industries holds a 65 per cent stake in zinc, lead and silver miner Hindustan Zinc. Hindustan Zinc's profits for the quarter ended March 2011 were up by 43 per cent, boosted by a 29 per cent increase in quarterly refined zinc output and a higher silver content in the lead concentrate output. The company's other income from investments more than doubled to Rs 302 crore.
Sterlite's copper business, where it earns a pre-negotiated TCRC (treatment of concentrate and refining charge) on the copper-concentrate it imports and processes, saw operating profits rise by 38 per cent, thanks to a global increase in TCRC charges. Despite flat volumes, realisations were helped by average quarterly prices for copper on the LME being higher by 33 per cent.
The aluminium business, the company's bauxite mining and aluminium production through Balco, Malco and a stake in Vedanta Aluminium (most of whose capacity is upcoming), managed a 20 per cent rise in operating profits. Prices of primary aluminium on the LME rose by around 16 per cent for the quarter, offsetting higher input costs.
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