Earnings Outlook
Rise in commodity prices to aid Vedanta performance
This story was originally published at 21:59 IST on 2 August 2024
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By Sayantan Sarkar
MUMBAI – Vedanta Ltd is expected to report a robust Apr-Jun quarter on all key operational metrics, on the back of rise in prices of zinc and aluminium, analysts said. The company is expected to post consolidated net sales of 362.05 bln rupees for the quarter, up 7.3% from a year ago and up nearly 2% from quarter ago, according to an average of estimates from three brokerage firms. The company's consolidated net profit is seen at 26.68 bln rupees, up 8.7% from a year ago and 109.5% on quarter.
The Anil Agarwal-promoted company's Apr-Jun results are scheduled to be declared on Tuesday.
Investors will monitor the management's comments on dividend payout, which will help its parent Vedanta Resources and other promoter entities repay their huge debts. This will also deplete cash reserves at the company level.
The company's earnings before interest, taxes, depreciation, and amortisation, or cash profits from operations is estimated at 99.24 bln rupees, according to the brokerage estimates.
In its earnings preview, Kotak Institutional Equities forecast a 57.0% increase in EBITDA on an annual basis due to higher commodity prices across major segments, particularly in zinc and aluminium. Nuvama Wealth Management, on the other hand, expects the EBITDA to grow 16.0% sequentially. Nuvama Wealth Management said zinc and aluminium prices rose 15% each during Apr-Jun from the March quarter.
"We expect Zinc International's EBITDA to improve from a low base (up 129% QoQ) because of higher prices and volume," Nuvama Wealth Management said in a report. However, EBITDA from iron ore operations is expected to decline due to reduced volumes, as there was a temporary suspension of mine production in Karnataka during May, it said.
Today, shares of Vedanta closed more than 3% lower at 434.20 rupees on the National Stock Exchange.
Following are the consolidated earnings estimates of Vedanta, collated from estimates from three brokerages:
| Brokerage | Net Sales (mln rupees) | Net Profit (mln rupees) | EBITDA (mln rupees) |
|---|---|---|---|
| Kotak Institutional Equities | 386,737.00 | 29,451.00 | 100,712.00 |
| Motilal Oswal Financial Services Ltd | 345,000.00 | 26,000.00 | 95,000.00 |
| Nuvama Wealth Management | 354,400.00 | 30,600.00 | 102,000.00 |
| Average | 362,045.67 | 28,683.67 | 99,237.33 |
End
Edited by Ashish Shirke
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