According to Kotak Institutional Equities, the company’s consolidated EBITDA is likely to decline 14.2% QoQ (down 1.1% YoY), led by lower realizations in the aluminium and zinc businesses. The fall will be partially offset by softer alumina costs.
Segment-wise, Kotak expects aluminium EBITDA to fall 10.4% QoQ due to weaker aluminium prices. Zinc India, the company’s major earnings contributor, is expected to see a sharper 21% sequential drop in EBITDA as zinc prices have softened globally. The oil and gas business, another key vertical, could post an 11.4% decline due to lower production volumes.
Nuvama echoes a similar view, pegging a 12% QoQ dip in consolidated EBITDA. It expects aluminium and zinc prices to have dropped around 7% during the quarter.
However, the brokerage sees some relief from a 7% fall in aluminium cost of production, driven by lower alumina prices and higher captive sourcing. Zinc India’s cost of production (ex-royalty), however, is expected to rise by 3% QoQ.
Nuvama further estimates a 21% decline in EBITDA from Zinc India, 4% from Zinc International, 8% from aluminium, and 16% from the oil and gas segment. The power and steel businesses may fare better sequentially.Motilal Oswal said investors will be closely watching Vedanta’s commentary on volume outlook and cost guidance across businesses. More importantly, the market is awaiting clarity on the status of the group’s long-pending demerger plan and updates on the financial position of the parent company, Vedanta Resources.The management’s forward-looking statements will be critical for sentiment, especially as the stock has seen sharp swings in recent months over debt and restructuring concerns.
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