After delivering the best ever financial performance in its history on the back of strong non-ferrous metal prices, Sterlite Industries is planning to diversify into power generation. The company would raise up to Rs12,500 crore from private placements and overseas equity or convertible bond issues.

Sterlite has filed regulatory statements in the US for an American Depository Shares (ADS) offering. The ADS would be listed on the New York Stock Exchange and the company may raise up to $2 billion, according to media reports.

The funds would be used to set up a 2,400 MW power plant in Orissa at an expected cost of $1.9 billion. The power business would be under a seprate subsidiary, Sterlite Energy. Sterlite may also part-finance the expansion plans of its subsidiaries, Hindustan Zinc and Balco, which have proposed to set up a new zinc smelter and an integrated mining project and power plant respectively.

Sterlite is also planning to buy out the remaining Balco stake held by the government. Sterlite had acquired majority stake in Balco when it was privatised by the previous NDA government in 2001 and had the option to buy out the remaining stake at a later date. However, the present government returned the payment made by Sterlite for acquiring the remaining stake after receiving legal advise that the government is under no obligation to divest its remaining holdings. The matter is currently under arbitration.

For the quarter ended 30th September 2006, Sterlite has reported a 68.39 per cent rise in standalone net profits to Rs136.56 crore as compared to Rs81.1 crore for the same quarter of previous year. Net revenues increased 92.21 per cent to Rs3,309.11 crore from Rs1,721.58 crore.

The company has booked a net amount of Rs133.67 crore for the quarter towards provisions on loans and investments and possible liability on guarantees issued, besides loss on sale of a business division. Adjusted for these one-time charges net profits have more than tripled to Rs270.23 crore.

Results are not strictly comparable as the company had sold its power transmission lines division to Sterlite Opticals with effect from 01 July 2006 for a consideration of Rs148.5 crore.

Strong product prices saw operating profits, excluding other income, more than double during the quarter. Operating margins as a percentage of net revenues improved to 11.35 per cent from 8.14 per cent a year ago. Other income increased to Rs21.45 crore from Rs17.81 crore

Input costs went up 96.51 per cent, but the company managed to bring down other operating costs. Staff costs declined 6.67 per cent while other operating expenses were lower by 12.46 per cent

Interest costs increased 79.1 per cent over the previous year quarter while depreciation charges went up very marginally.

Consolidated net profits for the quarter more than quadrupled to Rs1,071 crore from Rs256.87 crore for the previous year quarter. Consolidated revenues of the group have jumped 3 times to Rs6,829.25 crore from Rs2,724.77 crore a year ago. Consolidated results include the financial performance of Hindustan Zinc and Bharat Aluminium (Balco).