Vedanta gains over 1% ahead of Q4 results

Metals & Mining major Vedanta, which will announce its March quarter results on May 7, is expected to report a poor set of numbers.

The key thing to watch out for would be the management’s commentary on the progress on Gamsberg mine and outlook for base metal prices.

Research firm ICICIdirect expects Vedanta to report net profit of Rs 1,106.4 crore down 77 percent year-on-year (down 29.7 percent quarter-on-quarter). Net Sales are expected to decrease by 16.9 percent Y-o-Y (down 3 percent Q-o-Q) to Rs 22,961.1 crore.

Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to fall 30.1 percent YoY (down 3 percent QoQ) to Rs 5,477.2 crore, the report said.

Narnolia Financial Advisors expects Vedanta’s revenue (ex-copper) to grow 7 percent YoY and 3 percent QoQ to Rs 21,468 crore. YoY growth is primarily led by 22 percent YoY growth in zinc international revenue and Rs 1,400 crore revenue from other segment (steel) against Rs 196 crore in 4QFY18.

Aluminium revenue is expected to grow 5 percent YoY to Rs 7484 crore led by 8 percent YoY growth in volume to 527 kt. Oil and Gas revenue is expected to come in at Rs 2,836 crore (up 3 percent YoY, down 15 percent QoQ), led by 2 percent growth in gross production at 194000 boepd, the research firm said.’

The broking firm further added that EBITDA for the quarter is expected at Rs 6,117 crore (down 22 percent YoY, up 8 percent QoQ), led by significantly lower YoY aluminium EBTIDA at Rs 329 crore (down 75 percent YoY, up 25 percent QoQ) due to lower LME aluminium, higher alumina and power cost. Further more negative EBITDA of Rs 60 crore in copper against Rs 409 crore in 4QFY19 is also expected to impact overall EBITDA.

Vedanta’s Goa iron ore operation continues to be impacted by suspension of mining in Goa, it added.

Research and broking firm Motilal Oswal expects Vedanta’s EBITDA to decrease 2 percent QoQ (-29 percent YoY) to Rs 5,550 crore due to lower zinc volumes and the exchange rate impact. Adjusted PAT is estimated to decrease 51 percent QoQ to Rs 770 crore. EBITDA for aluminium is expected to come in at Rs 90 crore, on lower LME.

Emkay Global Financial Services expects sequential growth of 2 percent in topline driven by higher revenues from Gamsberg project and aluminum business in the wake of better availability of coal and bauxite. The firm expects the power business also to be sequentially better which should result in EBITDA margin expansion on a QoQ basis.

Edelweiss Securities expects Vedanta to report a 35.2 percent YoY (down 22 per cent QoQ) drop in profit at Rs 1,819 crore with revenues falling 15.7 percent YoY (down 1.6 percent QoQ) to Rs 23,300 crore.

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