Earnings Outlook
Higher base metal prices to push Vedanta's PAT up 58% YoY
This story was originally published at 20:47 IST on 30 January 2025
Register to read our real-time news.Informist, Thursday, Jan. 30, 2025
By Alina Geogy
MUMBAI – Higher prices of base metals, such as aluminium and zinc, and strong deliveries in the aluminium segment may act as key growth drivers for Vedanta Ltd.'s earnings for the December quarter. Vedanta's consolidated net profit is expected to rise 58% on year to INR 31.81 billion in the December quarter, as per an average of estimates from four brokerage firms.
The Mumbai-headquartered mining company is expected to clock its highest pace of growth in net profit since 2021 and the highest in sales since 2022 for the latest quarter. The company had posted a five-fold increase in net profit in the September quarter of 2020-21 (Apr-Mar).
However, the bottom line is seen declining nearly 27% sequentially. Its consolidated revenue for the latest quarter is seen rising 10.4% on year and 4.2% on quarter to INR 392.21 billion, as per the average of estimates.
The company's earnings before interest, tax, depreciation, and amortisation, or EBITDA, for the December quarter is seen at INR 105.32 billion, up 21.4% on year, according to the average of estimates. Vedanta's EBITDA is seen rising on-year on higher prices of commodities, and strong deliveries in the aluminium segment, partially offset by weak performance of the oil and gas and power segments, Systematix Shares and Stocks (India) said in an earnings preview report.
Nuvama Institutional Equities also believes that the company could report an increase in EBITDA due to higher prices of base metals, particularly aluminium and zinc. Higher costs of alumina will increase the cost of production of aluminium by 9% sequentially, Nuvama said in a report. Despite a spike in costs of alumina, the aluminium business is likely to be resilient with EBITDA per tonne rising $15 per tonne on a sequential basis to $843 per tonne, supported by higher prices and volumes of aluminium, Nuvama said. EBITDA of iron ore is expected to surge on quarter due to an increase in volume, the brokerage said.
The EBITDA for Vedanta's oil and gas division may decline 9.5% sequentially because of lower volumes, Kotak Institutional Equities said in a report. The company's zinc India division may see a 7.4%-sequential increase in EBITDA on the back of higher prices of zinc and silver, the brokerage said.
Vedanta will release its earnings for Oct-Dec on Friday. Shares of the company closed at INR 432.45, up 0.4%, on the National Stock Exchange on Thursday.
Following are the Oct-Dec earnings estimates for Vedanta based on reports compiled by Informist from four brokerages:
| Brokerage firm | Net Sales | Net Profit | EBITDA |
| ---------(In INR million)------------ | |||
| Kotak Institutional Equities | 405,617.00 | 32,541.00 | 104,180.00 |
| Motilal Oswal Financial Services Ltd. | 383,925.00 | 30,516.00 | 107,396.00 |
| Nuvama Wealth Management Ltd. | 378,900.00 | 32,500.00 | 104,700.00 |
| Systematix Shares and Stocks (India) Ltd. | 400,400.00 | 31,700.00 | 105,000.00 |
| Average | 392,210.50 | 31,814.25 | 105,319.00 |
End
US$1 = INR 86.62
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Saji George Titus
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