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Informist, Thursday, Jul. 31, 2025

By Rajesh Gajra

NEW DELHI - Following its subsidiary Hindustan Zinc Ltd.'s weak earnings performance for the June quarter and the recent decline in aluminium prices, Vedanta Ltd. is seen reporting a decline in its consolidated bottom line both on year and on quarter. The company's consolidated top line is expected to register low to flat growth compared to the year-ago quarter and a fall over the trailing quarter.

The metals-to-oil and gas conglomerate, which had announced a demerger scheme in September 2023 but has not received all statutory and regulatory approvals yet, will announce its June quarter financial results Thursday.

The company will also hold a call with investors and analysts Thursday following the earnings announcement. Apart from fundamentals, Vedanta is likely to receive a barrage of questions from investors and analysts on US-based Viceroy Research LLC's recent allegations of misgovernance and financial irregularities at the Vedanta group and with respect to promoters.

The domestic zinc operations of Vedanta are represented by Hindustan Zinc, which reported its June quarter earnings on Jul. 18. Hindustan Zinc's net profit fell 6.5% on year and 26% on quarter to INR 22 billion in the June quarter. The revenue of the subsidiary that produces zinc, lead, and silver fell 5% on year and 15% on quarter to INR 77.2 billion.

Vedanta's consolidated net profit for the June quarter is seen falling 18% on year and 15% on quarter to INR 29.7 billion, according to an average of estimates by five brokerage firms. The net profit estimates range from a low of INR 25.3 billion by Motilal Oswal Financial Services to a high of INR 37.2 billion by Systematix Shares and Stocks (India).

Vedanta's consolidated revenue is likely to rise 1.7% on year and down 10% on quarter to INR 363.59 billion. The lowest revenue estimate of INR 353 billion is by Nuvama Wealth Management, while the highest estimate of INR 370.7 is by Motilal Oswal. The consolidated earnings before, interest, tax, depreciation and amortisation is estimated to be INR 101.8 billion in the June quarter.

In the March quarter, Vedanta had reported a 2.5 times on-year rise in its consolidated net profit at INR 34.8 billion and a 14% increase in consolidated revenue from operations at INR 404.6 billion. Shares of Vedanta are currently up around 5% since the company announced its March quarter earnings.

Vedanta's consolidated revenue is likely to increase marginally "aided by higher revenue from zinc international and aluminum" segments, Antique Stock Broking said in a preview report. A fall in aluminium and zinc prices will drag the company's consolidated EBITDA down in the June quarter compared to the trailing quarter, according to Nuvama.

Vedanta's consolidated EBITDA is also seen declining both on quarter and on year by analysts at Kotak Securities' institutional equities division amid lower commodity prices in aluminium and zinc segments. But the brokerage expects lower alumina costs to partially offset the impact of the fall in prices in the aluminium segment.

The consolidated net profit growth of the company in the June quarter will largely track the EBITDA performance. Vedanta's subsidiary Hindustan Zinc reported a 2% decline in its EBITDA at INR 38.6 billion in the June quarter.

Apart from Viceroy Research's allegations, investors and analysts will also be keen to get an update on the demerger scheme of Vedanta announced nearly two years ago. The company had said earlier that it expected the process of demerger to conclude by the end of 2024-25 (Apr-Mar). But this has not yet materialised.

Under Vedanta's proposed demerger scheme, the demerged Vedanta Ltd. will have control over subsidiary Hindustan Zinc Ltd. and all base metal operations. Four other separate and independent companies will result from the demerger scheme -- Vedanta Aluminium Metal Ltd., Talwandi Sabo Power Ltd., Malco Energy Ltd., and Vedanta Iron and Steel Ltd.

On Wednesday, shares of Vedanta closed  at INR 434.60 on the National Stock Exchange, down 1%. According to data available with Informist, the stock currently has six buy calls from brokerages at an average target price of INR 557 and one hold call. Currently, there are no sell calls on the stock.

Following are the June quarter consolidated earnings estimates for Vedanta based on reports from five brokerage firms in descending order of estimate of net profit:

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Edited by Avishek Dutta

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