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Last Updated : Jul 15, 2016 05:38 PM IST | Source: Moneycontrol.com

Vedanta Q1 loss seen at Rs 80.9 cr: ICICI Securities

Sales are expected to decrease by 7.7 percent Q-o-Q (down 13 percent Y-o-Y) to Rs 14750.4 crore, according to ICICI Securities

 
 
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ICICI Securities has come out with its first quarter (April-June) earnings estimates for the metal sector. The brokerage house expects Vedanta to report a net loss at Rs 80.9 crore.


Sales are expected to decrease by 7.7 percent Q-o-Q (down 13 percent Y-o-Y) to Rs 14750.4 crore, according to ICICI Securities.


Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to fall by 6.8 percent Q-o-Q (down 19 percent Y-o-Y) to Rs 3235.3 crore.

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ICICI Securities report on Vedanta

Weakness in Hindustan Zinc operational performance more than offsets improvement in Aluminium and Oil earnings. Hence Q1FY17 EBITDA drops 7 percent Q-o-Q. Despite improving Zinc prices the drop in Zinc volumes have significantly impacted Q1FY17 operational results leading to a decline in Vedanta consolidated EBITDA.


 Iron ore has definitely seen volume moderation Q-o-Q and EBITDA is expected to contract, partly supported by the increase in pig iron prices.


TSPL should see the benefits of third unit commissioning. With an assumed PAF of 80 percent, EBITDA of Rs 2.5bn is possible. Aluminium business is expected to rampup EBITDA 23 percent Q-o-Q. The commissioning of the new pots has started with the last available data showing additional 21pots commissioning in VAL and 24 pots commissioning in BALCO. Power costs in Aluminium business will increase as full impact of the Clean Environment Cess will be felt in Q1FY17 which will be offsetted by the 5 percent provisional safeguard duty.


Zinc international volume guidance is 170-190kte for FY17E, and should see a gradual relief in CoP as Skorpion refinery operates at full capacity. The company has guided for CoP to be US$1200-1300/te in FY17. Also the extension of mine life in Skorpion should also gather pace at current LME. Other income should converge with the summation of reported other income subsidiaries – mainly Hind Zinc and Cairn which earlier witnessed variations on account of AS30 adjustment.

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First Published on Jul 15, 2016 05:38 pm
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