Vedanta Q1 Announcement: Revenue could grow by up to 15% YoY; EBITDA forecasted to grow by 59%

Metals major Vedanta is expected to report its net profit in the range of Rs 2,197-3,060 crore for the quarter ended June 30, 2024, as per estimates by three brokerages. Meanwhile, revenue is estimated at Rs 35,440-38,674 crore for the said quarter.

Estimates provided by Nuvama Institutional Equities, Kotak Institutional Equities and PhillipCapital.

While Nuvama has estimated the highest adjusted PAT for Vedanta, it sees a 30.8% decline in net profit growth. Meanwhile, Kotak and Phillip see PAT growth of up to 242% year-on-year.

Kotak’s top-line revenue estimate is Rs 38,674 crore, up over 15% year-on-year.

The company will report its earnings on Tuesday, August 6.

Here are the brokerage house estimates:

Nuvama

Nuvam has estimated adjusted net profit (PAT) at Rs 3,060 crore for the April-June quarter, which it expects to decline by 30.8% year-on-year while growing by 94.7% quarter-on-quarter. Sales for the quarter under review are expected to be around Rs 35,440 crore, up 5.1% year-on-year and down 0.2% quarter-on-quarter. The brokerage has estimated earnings before interest, tax, depreciation and amortisation (EBITDA) at Rs 10,200 crore, which could grow by 58.9% year-on-year and 16.4% quarter-on-quarter. Nuvam attributes 16% quarter-on-quarter growth to this. Vedanta’s EBITDA in Q1 was down on higher zinc and aluminium prices (up 15% qoq), partially offset by lower volumes in Oil & Gas, Zinc and Aluminium (down 1-4% qoq).

Zinc International’s EBITDA is expected to improve from a low base (up 129% QoQ) on higher prices and volumes. Iron ore EBITDA is expected to decline on reduced volumes as there is a temporary suspension of mine production in Karnataka in May 2024, it said in a preliminary note.

Kotak shares

Kotak estimates for the company’s adjusted PAT at Rs 2,945 crore, which could grow by 242.5% year-on-year while growing by 87.8% quarter-on-quarter. The Anil Agrawal Company’s net sales estimate is Rs 38,674 crore, which could grow by 14.6% year-on-year and 8.9% quarter-on-quarter.

EBITDA is estimated at Rs 10,071 crore, up 56.9% YoY and 14.9% QoQ. Meanwhile, EBIT could grow to Rs 7,328.2 crore on a YoY and sequential basis. That would be an 89.4% YoY and 21.6% QoQ growth.

“We forecast a 15% quarter-on-quarter growth in EBITDA (+57% year-on-year) due to higher raw material prices in core segments, particularly zinc and aluminium,” Kotak said in a brokerage note.

Aluminium EBITDA is forecast to increase by 46% QoQ (+140% YoY), mainly due to higher LME prices, while Oil & Gas EBITDA is expected to decline by 26% QoQ due to lower volumes and higher costs.

Zinc India is expected to report EBITDA growth of 9.7% quarter-on-quarter on higher zinc prices, partially offset by lower volumes.

PhillipCapital

The company’s PAT is estimated at Rs 2,197 crore, up 66% YoY and 45% QoQ. Meanwhile, revenue is estimated at Rs 36,069 crore, up 7% YoY and 2% QoQ.

EBITDA could come in at Rs 9,493 crore, up 48% year-on-year and 8% sequentially. In terms of EBITDA margin, this metric is expected to come in at 26.3% as against 19% year-on-year and 24.7% quarter-on-quarter.

This broker notes that Zinc International, Iron ore and Copper segment volumes will increase QoQ. Aluminum saw volumes decline sequentially, while LME aluminum, zinc and lead improved by 14%, 16% and 6%, respectively. Crude oil is higher by 4% QoQ, while overall margins improve QoQ.

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