Sterlite Tech jumps up almost 6.5%

Sterlite Technologies rose almost 6.5% to Rs.308.50 and continues to remain very strongly in the green.

The company announced that Sterlite Technologies S.p.A., a wholly owned subsidiary of Sterlite Technologies, has entered into a share purchase agreement today to acquire a 100% stake in Metallurgica Bresciana S.p.A., a European specialized optical cable manufacturer based in Italy.

The acquisition is being made for a cash consideration of Euro 46.67 million and is expected to be completed in two weeks.

This buy is being viewed very positively as it is expected to expand Sterlite Tech’s optical fiber cabling business by augmenting its access to key European markets and add to its portfolio of speciality cables.

What could have propelled the stock price further is the report by two brokerage houses, Emkay and Edelweiss who have given this a big thumbs up.

Emkay has maintained its ‘buy’ target with a price of Rs.500 and expects the acquisition to add 5 to 7% to the FY20 earnings.

Edelweiss too has maintained its ‘buy’ with a target price of Rs.425 and says the acquisition will lead to 9% EPS accretion.