In the last one year, the stock has corrected more than 20%, largely due to concerns over the company’s ability to service its large debt.
While earnings will remain in the watchlist of investors, their focus will be more on the company’s commentary on the roadmap to meet its debt obligations.
Here are the major monitorables in the earnings of the Anil Agarwal-led mining conglomerate.
Sales/PAT
The company is seen reporting consolidated revenue of Rs 33,676-35,477 crore, according to estimates given by three brokerage firms. This is compared to a revenue of Rs 34,102 crore a year ago and Rs 34,184 crore a quarter ago.
Consolidated net profit of the company is seen between Rs 974 crore and Rs 1,589 crore, against a profit of Rs 1,229 crore a year ago, and a loss of Rs 1,226 crore a quarter ago.
Operational Performance
Operating profit is seen in the range of Rs 6,667 crore to Rs 7,988 crore, compared to Rs 6,734 crore a year ago and Rs 6,718 crore a quarter ago. Kotak Institutional Equities has forecast a 19% YoY and sequential increase in EBITDA due to stronger commodity prices across segments, particularly in zinc and aluminum.
Aluminum business EBITDA is likely to increase sequentially by 25% and 155% YoY, primarily led by improved realizations, the brokerage said.
Debt/Balance Sheet
Vedanta managed to reduce its net debt by Rs 1,420 crore in the September quarter to Rs 57,771 crore. All eyes will be the trajectory continued in the December quarter as well.
As of September end, its net debt-to-EBITDA ratio was down to 1.64 times from 1.88 times at the end of June quarter.
Debt reduction remains one of the primary concerns for the market, and this has triggered rating downgrades for Vedanta by rating agencies.
On Wednesday, India Ratings downgraded the rating on the debt facilities of the company to “A+” from “AA-”, expecting an impairment in the company’s financial flexibility on borrowing constraints.
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