The estimates of Nuvama Institutional Equities, ICICI Securities, Kotak Institutional Equities and Motilal Oswal Financial Services (MOFSL) have been taken into account.
The net profit is expected to fall on a quarter-on-quarter basis amid cost pressures. Margins are also expected to take a sequential hit due to higher costs in the aluminium segment and mixed trends in commodity prices.
Street will be keeping an eye on the management commentary around its demerger plans and regarding its debts.
Vedanta is set to announce its January-March quarter earnings on Wednesday, April 30.
Here’s what brokerages recommended.
Nuvama
Metal major Vedanta is expected to report an adjusted PAT of Rs 3,540 crore, marking a robust 133% YoY increase, though showing a marginal decline of 0.2% on a QoQ basis. Meanwhile, the revenue from operations for the quarter under review is seen at Rs 37,820 crore, registering a 6.5% YoY growth, but reflecting a 3.3% QoQ decline.The company’s Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) is pegged around Rs 10,830 crore, showing a healthy 24% YoY increase, but could go down 2.4% QoQ, indicating slight sequential moderation in operating profitability.
Nuvama said that Vedanta’s likely EBITDA decrease on a sequential basis will be due to a mixed bag of metal price changes, as aluminium inched up by 0.8% QoQ while zinc decreased 7% QoQ.
“Higher alumina cost shall increase aluminium CoP by 5% QoQ. Zinc CoP is likely to further decrease by 2% QoQ. We expect aluminium/power/O&G EBITDA to decrease by 2.6%/2.1%/4.2% QoQ while Zinc India/international zinc to rise by 0.2%/1.8% QoQ,” it said.
ICICI Securities
The PAT may be reported at Rs 5,340 crore, reflecting a substantial 118% YoY increase, indicating strong overall earnings performance compared to the previous year. However, on a sequential basis, PAT may decline by 14%, suggesting some moderation in net profitability.
The sales in Q4FY25 could be reported at Rs 39,370 crore, showing a solid 11% YoY growth, while on a QoQ basis, topline may see a marginal uptick of 0.7%.
EBITDA is seen around Rs 10,809 crore, registering a 23% YoY increase YoY while declining by 2.7% QoQ.
“Higher volumes in Zn-India and Al are likely to aid performance. Cost likely to remain benign.. Alumina inventory impact likely to impact CoP/t of Aluminium division by USD 100/te though lower coal cost will partially offset the impact. Power division impacted by lower generation while ESL performance is likely to improve,” ICICI Securities note said.
Vedanta is a buy candidate for ICICI Securities for a price target of Rs 607.
Kotak Institutional Equities
Kotak sees Vedant’s January-March quarter net profit at Rs 3,287 crore, reflecting a significant 141% YoY growth. However, the PAT may decline 7% sequentially. Meanwhile, revenue may be reported at Rs 39,173 crore, which could be an increase of 10.3% YoY.
The EBITDA is pegged around Rs 10,772 crore, which could be a healthy 23% YoY increase while a 3% QoQ decline. As for the EBITDA margin, the estimates are at 27.5%, representing an expansion of 280 bps YoY while contracting marginally on the QoQ basis by 90 bps.
The sequential contraction in margins will be on account of due to higher costs in the aluminium segment and mixed trends in commodity prices.
“We forecast the aluminum EBITDA to decrease 5% QoQ (+44% YoY), primarily due to higher input costs. The oil & gas division to witness an EBITDA decline of 3.2% QoQ on lower volumes and the Zinc India division to be stable QoQ (+25% YoY), with higher volumes offset by lower zinc prices,” Kotak said in a brokerage note.
Motilal Oswal
Net Profit is expected at Rs 3,384 crore, delivering a 116% YoY growth though a 4.6% QoQ decline. Sales revenue for the quarter is likely to stand at Rs 38,906 crore, reflecting a 9.6% YoY increase, though a marginal dip of 0.5% QoQ.
The EBITDA is expected to be around Rs 10,786 crore, marking a 23% YoY increase while a 2.9% QoQ decline.
Management commentary on Vedanta’s demerger status and its guidance on volumes and CoP across verticals will be critical. Also, updates on the parent debt situation will be a key monitorable, along with the management’s guidance on future dividend payout.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
