Vedanta Q4 Preview: Mining giant likely to post weak numbers; EBITDA may slip 10% YoY

Vedanta Q4 Preview: Mining conglomerate Vedanta will report its March quarter (Q4 FY24) results on Thursday, April 25. According to Zee Business Research, the metal giant will post a weak set of numbers. Last year, the research team said the company had incurred a one-time loss of Rs 1,336 crore. The team further said that the company's zinc segment's performance has been subdued. The oil & gas segment is also expected to post muted numbers. On the other hand, the aluminium segment is likely to benefit due to a reduction in costs. 

Vedanta Limited, a subsidiary of Vedanta Resources, is estimated to report consolidated revenue of Rs 35,065 crore for the quarter under review. This will be 8 per cent lower than the Rs 37,930 crore logged in the corresponding quarter of the previous fiscal. EBITDA, or earnings before interest, taxes, depreciation, and amortisation, is estimated to fall 10 per cent YoY to Rs 8,471 crore against Rs 9,459 crore registered in the year-ago period. Margin is also expected to fall to 24.2 per cent from 24.9 per cent while profit after tax (PAT) is expected to rise 8 per cent YoY to Rs 2,036 crore.

Vedanta is one of the world’s leading natural resources companies, spanning across India, South Africa, Namibia, Liberia, the UAE, Korea, Taiwan, and Japan, with significant operations in oil & gas, zinc, lead, silver, copper, iron ore, steel, nickel, aluminium, power & glass substrates, and foraying into semiconductors and display glass. 

Recently, Vedanta Resources Chairman Anil Agarwal said the current financial year that started on April 1 will be a transformative year for Vedanta Limited. Agarwal added that Vedanta will prioritise disciplined growth while eyeing a USD three billion deleveraging in the next three years. In a communication to shareholders, Agarwal said the group will pursue sustainable growth while maintaining a healthy balance sheet.

"These include further deleveraging (parent) Vedanta Resources by USD three billion in the next three years and achieving an annual group EBITDA of USD 7.5 billion within 2 years," the chairman said.

"FY25 will be a transformative year for us on many fronts as we prioritise disciplined growth, operational excellence, and exploring opportunities along the value chain," Agarwal said. 

Last year, the Vedanta Board approved a growth capex of USD 320 million for capacity expansion of ferrochrome to 450,000 tonnes. "This will make us India's largest ferrochrome producer by FY27." Recognising the potential of its captive manganese mine, Vedanta is exploring the possibility of diversifying into ferromanganese alloy production, the chairman said.

"On a parent company level, Vedanta Resources has delivered on its commitment by deleveraging the balance sheet by over USD 3.5 billion in the last two years," Aggarwal added.

Vedanta share price performance

On a year-to-date (YTD) basis, the stock has rallied 49 per cent while in one year, shares have gained around 40 per cent. In comparison, the Nifty Metal index has jumped 60 per cent in the past 12 months, and the Nifty50 index has surged 26.5 per cent.