Vedanta shares rise more than 5% on robust Q4 results; what is your next course of action
Vedanta’s Q4 earnings announcement on Thursday drove a notable increase in the company’s share price of more than 5% during Friday early trade. Analysts observed that the increase in share prices was mostly driven by Vedanta’s profits performance for the March quarter, which surpassed forecasts.
In the fourth quarter of FY24, Vedanta revealed a consolidated net profit of Rs 2,273 crore, which is a 21% fall from the previous quarter’s Rs 3,132 crore and a 27% year-over-year decline.
Nevertheless, during the January–March quarter, impairment was recorded for the shuttered Sterlite Copper facility, and custom smelting at its copper business was excluded, which had an influence on these results.
Despite these difficulties, Vedanta’s Q4FY24 EBITDA rose 3% sequentially to Rs 8,969 crore, mostly as a result of increasing volumes and cost-cutting measures implemented throughout the company. However, changes in currency rates and declining base metal prices on the London Metal currency (LME) somewhat offset this rise.
Vedanta’s Q4FY24 revenue decreased 6% year over year but stayed unchanged sequentially at Rs 34,937 crore due to lower LME prices and currency rate variations.
Analysts estimated Vedanta’s adjusted net profit to be Rs 1,549 crore and its EBITDA to be Rs 8,768 crore. Analysts at Antique Stock Broking said that this was 6.3% higher than the consensus and 3.4% better than their expectation.
dealers in Vedanta
Motilal Oswal discussing Vedanta
Vedanta’s performance in the fourth quarter of FY24 was mostly in line with expectations across all businesses, according to a recent study by Motilal Oswal. The move to prolong HoldCo.’s bond maturity by three years is seen to have given the business sufficient short-term cash comfort.
Moreover, the company’s capital expenditure plans are proceeding according to plan, which should lead to additional cost reductions. In light of these events, Motilal Oswal has maintained its “neutral” rating for Vedanta and has slightly raised its target price to Rs 360.
