Income from operations during the period has risen by 53 per cent to Rs 382.33 crore (Rs 249.98 crore) owing to the improved capacity utilisation at the company's copper plants. Interest charges have increased to Rs 21.94 crore from Rs 1.88 crore while depreciation has risen by 239 per cent to Rs 19.87 crore owing to the full impact of the commissioning of the copper smelter and refinery plant. Other income for the period has increased to Rs 7.40 crore from Rs 6.91 crore.

The company's chairman and managing director Anil Agarwal said: "Sterlite's competitiveness stems from it being one of the lowest cost producers in the world." The despatches of jelly-filled cables and optic fibre cables have been lower in the quarter owing to delayin receipt of orders. Substantial orders have since been received in October 1998 and sales are expected to be higher this year. The company is slated to increase its copper smelting capacity to 1.5 lakh tpa in two years' time. It also proposes to construct a new greenfield aluminium smelter with technical collaboration with Aluminium Pechiney, France, in Orissa.

INSIGHT

Higher capacity utilisation sees growth: Sterlite's first-quarter results indicate that operating profits have risen by a sizable 120 per cent to Rs 71.2 crore. Commensurately, operating margins have risen to 18 per cent from 13 per cent. Higher capacity utilisation of the copper division, which contributes 76 per cent to the turnover, is responsible for the same. It has to be noted that the copper smelter had a checkered production schedule in the same period last year. Turnover has been spurred by higher volume growth in the copper rod, optic fibre and aluminium foil business. Sterlite's conversion costs for its coppersmelter are at a low 13 cents/lb compared with the global average of 18.2 cents/lb owing to the following reasons: First, it uses the latest Isa smelt technology which automatically saves 3-4 cents/lb. Second, its manpower costs are lower when compared globally. Third, it gets better realisation from its by-product sulphuric acid. All this should ensure a cash profit of around Rs 200 crore from this division for the financial year which is scheduled to attain full capacity utilisation in 45 days' time. The scrip shed Rs 1.40 to close at Rs 156.30 at the bourse.