Vedanta - Q2FY21 Result Update - ICICI Direct

On the back of a sequential uptick in non-ferrous metal prices, Vedanta reported a steady Q2FY21 performance. Consolidated topline for Q2FY21 came in at Rs. 21107 crore, up 32% QoQ. Consolidated EBITDA for Q2FY21 came in at Rs. 6531 crore, up 48% YoY, 64% QoQ. Steady EBITDA performance in Q2FY21 on a YoY basis was supported by higher volume at Zinc India business, subdued input commodity prices, lower cost of production at aluminium, steel and zinc business and rupee depreciation, partially offset by lower volume at the oil & gas business. Consolidated EBITDA margin for the quarter was at 30.9%, up 1080 bps, 590 bps QoQ. Tax expense for Q2FY21 was at Rs. 2370 crore vs. Rs. 510 crore in Q1FY21 and a tax credit of Rs. 1609 crore in Q2FY20. Normalised tax rate (excluding tax on dividend income of Zinc India business) for the quarter was 29% vs. 20% in Q1FY21, driven by change in profit mix in business. Ensuing reported PAT for Q2FY21 was at Rs. 824 crore while adjusted PAT (before exceptional items and tax on dividend) was at Rs. 1979 crore.

Valuation & Outlook

Vedanta’s earnings remain sensitive to movement in commodity prices. On a sequential basis, non-ferrous prices have witnessed an uptick auguring well for the company. We value the stock on a SoTP basis and arrive at a target price of Rs. 100. We maintain HOLD rating on the stock.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Vedanta_Q2FY21.pdf

Shares of Vedanta Limited was last trading in BSE at Rs.108 as compared to the previous close of Rs. 107.5. The total number of shares traded during the day was 222070 in over 3317 trades.

The stock hit an intraday high of Rs. 108.45 and intraday low of 107.5. The net turnover during the day was Rs. 23989648.

Source : Equity Bulls

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