Sterlite Industries India Limited (ADR) (SLT)

pencils2 (99.82) Submitted: 11/13/07 10:31 AM : Start Price: $19.12 SLT Score: -26.87

Indian producer of copper, zinc, and aluminum that just went public in the U.S. this June. They have a 42% share in the copper market, are majority shareholder of Hindustan Zinc which has a 61% share of Indian zinc market, and are majority shareholder of Bharat Alumnium which has a 25% share of Indian aluminum market.

Reasons to like them:

1. Huge control over various metals will give the company immense opportunity as India's infrastructure rapidly expands.

2. $1.51 billion in cash with $548.41 million in debt; from fiscal 2006 to fiscal 2007 earnings tripled and cash flow production doubled. Production is expanding very quickly as well.

3. Entering the power generation business with good-sized investments (close to $2 billion). The potential in this area in India is enormous and Sterlite has a lot of experience with it.

Main risk:

1. Company's entrance into power generation market doesn't go well (this would be a lot of money down the drain).

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