Vedanta shares in focus after Q3 PAT jumps 76% YoY; CLSA raises target price to Rs 530

Vedanta shares will be in focus on Saturday, February 1, after the company reported a 76% year-on-year (YoY) rise in consolidated net profit for the quarter ended December 31, 2024, at Rs 3,547 crore.

Revenue from operations grew 10% YoY to Rs 38,526 crore, while consolidated EBITDA rose 30% YoY to Rs 11,284 crore. Margins improved by 517 basis points YoY to 34%.

“We have delivered our highest-ever third-quarter EBITDA. Our strategic focus on cost optimization and production ramp-up across our key businesses has helped us continue delivering this outperformance," said Arun Misra, Executive Director, Vedanta.


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Revenue growth during the quarter was driven by favourable market prices and higher premiums. The strong operating performance was mainly due to structural cost-saving initiatives across businesses, favorable output commodity prices, partially offset by input commodity inflation.

Operationally, the company recorded the highest ever aluminum production of 613 kt, up 2% YoY.

Notably, Vedanta reported a 58% YoY jump in EBITDA at its Aluminium business and a 28% YoY increase in the Zinc India business. The company expects this outperformance to continue in the coming quarters, driven by ongoing growth initiatives and business integration projects.

“This strong quarter success has been driven by our focus on cost efficiencies, volume growth, and favourable commodity prices. The recent upgrade in our credit rating, along with a leverage improvement to 1.4x, highlights our financial strength and the market’s confidence in Vedanta’s growth trajectory," said Ajay Goel, CFO, Vedanta.

Gross debt at the end of the December quarter stood at Rs 78,496 crore with a net debt of Rs 57,358 crore. Cash and cash equivalents of the company were at Rs 21,138 crore.

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Brokerage view

CLSA has maintained an 'Outperform' rating on Vedanta, raising the target price to Rs 530 from Rs 520.

The brokerage highlights that the commissioning of projects is crucial for an earnings turnaround, while leverage remains under control. Additionally, dividend yield is expected to stay high, and profitability is likely to improve further in Q4.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)