Global brokerage firms maintained their rating on Vedanta on Wednesday after the metals & mining firm’s March quarter consolidated profit fell a 43.3 percent year-on-year (YoY) to Rs 3,218 crore. Profit in the year-ago period stood at Rs 5,675 crore.
Profit attributable to owners declined 45.5 percent to Rs 2,615 crore compared to the same period last year, the company said in its filing.
Revenue from operations fell 15.1 percent YoY to Rs 23,468 crore in the quarter ended March 2019.
CLSA slashed its target price to Rs 135 from Rs 170 earlier.
“There are concerns over related party transaction which is likely to remain an overhang. EBITDA improved on a QoQ basis for aluminium & overseas zinc business,” said the CLSA report. However, slow volume ramp-up in zinc & oil is a concern.
Edelweiss also maintained its hold rating on Vedanta post March quarter results and slashed its target price to Rs 175 from Rs 200 earlier.
"Vedanta’s Q4FY19 EBITDA was down 22 percent on a YoY basis but it met consensus owing to cost efficiencies at Zinc (Zn) International and aluminium (Al) divisions. Going ahead, despite sustained cost efficiencies at key divisions, we see lower Zn prices keeping earnings growth in check and stock performance muted," said the report.
Here’s what other global brokerage firms recommended on Vedanta post Q4 results:
Morgan Stanley: Equal Weight| Target Rs 176
Morgan Stanley maintained its Equal Weight rating on Vedanta post Q4 results with a target price of Rs 176.
The core EBITDA was in-line with estimates, but the focus remains on volume growth in zinc, aluminium, and oil & gas. The focus will also be on better cost management in the near term, said the note.
Citigroup: Neutral| Target Rs 195
Citigroup maintained its Neutral rating on Vedanta post Q4 results with a target price of Rs 195. The Q4 EBITDA was in-line with estimates. There are still some concerns on parent leverage.
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