The board of directors, which met in Mumbai on Monday, have recommended a dividend of Rs 8.50 per share (85 per cent) for the year, resulting in a dividend outgo of Rs 42.38 crore.

At the Bombay Stock Exchange, the company's scrip gained 7 per cent to close at Rs 152. Sterlite CMD Anil Agarwal said, "We have done extremely well in all our businesses. Even the current fiscal is expected to be quite exciting as we hope to achieve about 35 per cent sales growth."

The company's 100,000-tonne copper smelter, the first private sector facility, went on stream in April. The company plants to run the unit, which is operating at 60 per centcapacity utilisation, at its optimal capacity within the next six months.

The company has also decided to go ahead with the expansion of its smelter to 150,000 tonnes, involving Rs 350 crore over the next two years.

During 1997-98, Sterlite's gross profit increased by 30 per cent to Rs 194.43 crore, against Rs 149.22 crore in the previous year, while cash profit was higher at Rs 193.36 crore. The company's interest cost shot up to Rs 15 crore, from a paltry Rs 1 crore last year. Provision for depreciation increased from Rs 21.17 crore to Rs 36.69 crore during the period. Earnings per share improved to Rs 35.25 from Rs 28.57 in the last fiscal.

The jelly-filled telecommunication-cable division recorded a 75 per cent growth in volumes to 58 lakh cable kilometer (LCKM), while the optical fibre-cable business grew five-fold. The copper division contributed around 60 per cent to the company's sales turnover. "The per tonne operating cost of the copper smelter and refinery is among the lowest in the world,and the company estimates cash break-even for copper business to be about 30 per cent," Sterlite has said.

Meanwhile, Sterlite subsidiary -- Madras Aluminium Company (Malco) -- has reported net sales of Rs 221 crore for the year ended June 30, 1998, up from Rs 214 crore in the previous 15-month period. Net profit shot up to Rs 50.41 crore from Rs 6.22 crore in the previous fiscal. Production, during the year, rose 8 per cent to 25,140 metric tonne, while realisation increased to Rs 82,664 per tonne, as against Rs 75,825 per tonne in the previous fiscal.

Positive impact on stock

The market has reacted positively to Sterlite's results, with the stock appreciating by about 7 per cent to Rs 152. Operating profits have risen by an impressive 40 per cent. Commensurately, operating margins have increased to 15.05 from 14.45 per cent. This is mainly attributed to higher volume sales in all its divisions. Also, " Other income" as a percentage of PBT has decreased to 4.70 per cent from a whopping 27 percent. The copper division contributed 61 per cent, around Rs 850 crore to the total turnover. The company captively consumes around 15 per cent of its own copper. Moreover, it has priced it around 5-6 per cent less than the landed cost of imports. On reaching a near full capacity utilisation of 1 lakh tpa, the division should be achieving a operating margin of around 30 per cent. Sterlite will have to shell out Rs 50 crore in the current year (total Rs 350 crore ) for its copper-smelter expansion. The expansion is slated to be funded through internal accruals. The jelly-filled telecom-cable business is slated to better its performance in the current financial year with tender volume slated to increase by 390 lakh cable kilometre.