Following the announcement of a 76% year-over-year (YoY) increase in consolidated profit for the quarter ending December 31, 2024, at Rs 3,547 crore, Vedanta shares will be the subject of attention on Saturday, February 1.
Consolidated EBITDA increased 30% YoY to Rs 11,284 crore while operating revenue increased 10% YoY to Rs 38,526 crore. Margins increased to 34%, a YoY improvement of 517 basis points.
“We achieved our greatest third-quarter EBITDA to date. We have maintained this outperformance via our strategic emphasis on cost minimization and production ramp-up across our major businesses,” stated Arun Misra, Executive Director, Vedanta.
Higher premiums and favorable market prices drove revenue growth throughout the quarter. All enterprises ‘ favorable output commodity prices and structural cost-cutting measures were the primary drivers of excellent operational performance, which was somewhat counterbalanced by inflation in input commodities. Operationally, the business produced 613 kt of aluminum, the most ever, and a 2% YoY increase.
Notably, Vedanta recorded a 28% YoY growth in Zinc India and a 58% YoY gain in EBITDA at its Aluminum division. Due to current expansion efforts and corporate integration projects, the company anticipates this outperformance will continue in the upcoming quarters.
“Our emphasis on cost reductions, volume expansion, and favorable commodity pricing has been the main drivers of this quarter’s performance. Ajay Goel, CFO of Vedanta, stated, “The market’s trust in Vedanta’s development trajectory and our financial health are demonstrated by the recent upgrading in our credit rating and an increase in leverage to 1.4x.
After the December quarter, the total debt was Rs 78,496 crore, of which Rs 57,358 was the net debt. The company’s cash and cash equivalents totaled Rs 21,138 crore.
Brokerage View:
With the target price increased from Rs 520 to Rs 530, CLSA has maintained its ‘Outperform’ rating on Vedanta. The brokerage emphasizes that although borrowing is controlled, project commissioning is essential for an earnings turnaround. Furthermore, the dividend yield is anticipated to remain strong, and Q4 profitability will continue to rise.
