Vedanta shares rise after better-than-expected Q3 results; CLSA downgrades the stock

Vedanta share price BSE, Vedanta share price target: Vedanta shares edged higher on Monday, January 29, after the billionaire Anil Agarwal-led mining company reported a better-than-expected set of financial results for the quarter ended December 31, 2023. The earnings announcement, post-market hours on Thursday, was followed by a downgrade from foreign brokerage CLSA to ‘sell’ from ‘outperform’. The stock rose by as much as Rs 5.55, or 2.1 per cent, to Rs 269.1 apiece on BSE. The counter ended at Rs 267.75, up 1.59 per cent on BSE.

Vedanta Q3 results

The mining major reported an 18.3 per cent year-on-year fall in consolidated net profit to Rs 2,013 crore with a 4.2 per cent increase in revenue to Rs 35,541 crore for the October-December period. The high base of the corresponding quarter a year ago was on the back of an exceptional gain of Rs 903 crore.

The company’s margin, a key measure of profitability, improved by 330 bps on a year-on-year basis to 24 per cent, according to a regulatory filing.

According to Zee Business research, Vedanta’s quarterly net profit was estimated at Rs 1,049 crore, revenue at Rs 33,390 crore and margin at 21.4 per cent.

It posted Rs 8,531 crore in earnings before interest, taxes, depreciation and amortisation (EBITDA) for the fiscal third quarter, as against Rs 7,067 crore for the corresponding period a year ago.

Zee Business analysts had pegged the mining company’s EBITDA for the December quarter at Rs 7,256 crore.

Vedanta share price target: CLSA downgrades the stock

CLSA maintained its target for the Vedanta stock at Rs 230, suggesting a downside potential of nearly 13 per cent from its previous close.

According to the  brokerage, lower costs drove Vedanta’s earnings beat and the outperformance on the restructuring of VRL debt was unwarranted.

Vedanta’s quarterly EBITDA was above CLSA’s estimate on the back of lower costs across segments.

What does Vedanta do?

Vedanta, a subsidiary of Vedanta Resources, is a diversified global natural resources company.

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