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Informist, Monday, Apr. 28, 2025

 

By Rajesh Gajra

 

NEW DELHI – The top line of Vedanta Ltd. would have likely risen in the March quarter on the back of a strong volume growth in the aluminium and zinc segments, according to analysts. The domestic zinc, silver, and lead operations of the company, as represented by Hindustan Zinc Ltd.'s March quarter earnings announced on Friday, recorded a strong growth in revenue of zinc and silver on the back of higher metal prices, and a 16-quarter low cost of production of zinc.

 

Vedanta's operating profit is seen aided by Hindustan Zinc's EBITDA jump and expected jump in aluminium segment EBITDA. The bottom-line growth will likely track the operating profit growth.

 

Vedanta will likely report a consolidated revenue from operations of INR 386.87 billion in the March quarter, up 9% on year, according to an average of estimates by six brokerage firms. The consolidated net profit is seen at INR 37.20 billion. But excluding an outlier estimate of INR 53.40 billion by brokerage ICICI Securities, the net average net profit estimate is INR 33.96 billion, up 2.5 times on year.

 

The company's operating profit, or earnings before interest, tax, depreciation, and amortisation, for the March quarter is seen at INR 108.51 billion, up 21% on year. Sequentially, however, Vedanta's earnings performance is seen weak with the analysts' estimate representing a decline of 1.1% in revenue, 4.9% in net profit, and 3.8% in EBITDA.

 

The highest net profit estimate is INR 36.22 billion by Emkay Global Financial Services after excluding the outlier estimate, while the lowest estimate is INR 31.50 billion by Systematix Shares and Stocks (India). The revenue estimates range from a low of INR 364 billion by Systematix to a high of INR 404.46 billion by Emkay.

 

In the December quarter, Vedanta's consolidated revenue from operations increased 10% on year and 3.7% sequentially to INR 385.26 billion, while the consolidated net profit rose 76% to INR 35.47 billion compared with the year-ago quarter and fell 19% sequentially.

 

Vedanta owns around 63% shares of Hindustan Zinc as a promoter. Hence, around 63% of Hindustan Zinc's net profit would reflect in the bottom line of Vedanta. Hindustan Zinc Friday reported its earnings for the March quarter, with its net profit rising 46% on year to INR 29.76 billion, EBITDA rising 32% to INR 48.16 billion, and revenue from operations increasing 20% to INR 90.41 billion.

 

According to ICICI Securities, higher volumes in India of zinc and aluminium will likely aid the performance of Vedanta. The power division of the company will be impacted by lower generation, while steel segment performance will likely improve, the brokerage said.

 

On operating profit, brokerage Kotak Securities' institutional equities division said that Vedanta's on-year growth in EBITDA in the March quarter will be supported by zinc and aluminium segments, and dragged by iron order, oil and gas, and steel segments. ICICI Securities sees Vedanta's copper segment EBITDA per tonne declining 10.4% on year in the March quarter.

 

The company will detail its March quarter earnings Wednesday. Post-announcement of the results, the investors and analysts will be monitoring demand trends in aluminium, copper, power, and steel segments of the company. According to Motilal Oswal Financial Services, investors will be keen to know Vedanta management's comments on the status of the demerger of its businesses and its guidance on volumes and cost of production across verticals. "Management's update on the parent debt situation is crucial," said Motilal Oswal in its preview report.

 

Shares of Vedanta ended Monday 0.7% higher at INR 416.10 on the National Stock Exchange.

 

Following are the Jan-Mar consolidated earnings estimates for Vedanta based on reports from six brokerage firms in descending order of estimate of net profit:

 

Brokerage firm	Net Sales	Net Profit	EBITDA
	(In INR million)
ICICI Securities Ltd	393,700	53,403	108,094
Emkay Global Financial Services Ltd	404,462	36,224	111,178
Nuvama Wealth Management Ltd	378,200	35,400	108,300
Motilal Oswal Financial Services Ltd	389,100	33,800	107,900
Kotak Institutional Equities	391,733	32,871	107,717
Systematix Shares and Stocks (India) Ltd	364,000	31,500	107,900
Average	386,866	37,200	108,515

 

End

 

Edited by Akul Nishant Akhoury

 

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