Mining major Vedanta’s Consolidated net sales stood at `341 bn in Q3FY23, in line with MOSL estimated. The reduction in revenue q-o-q was due to a decline in commodity prices and lower strategic hedging gains, partially offset by favourable forex movement.
The consolidated Ebitda stood at `71 bn, below our estimate of `94 bn due to lower Ebitda from aluminum, steel, zinc and power businesses. Ebitda fell q-o-q due to (i) lower commodity prices, (ii) higher input costs and lower strategic hedging gains. APAT stood at `16 bn, 52% below our estimate of `32 bn due to weak operating performance and higher depletion from the oil & gas vertical.
The company continues to focus on volume growth and increasing the share of value-added capacity, which should improve margins. Aluminum demand is improving and the company expects the prices to improve. The share of aluminum Ebitda in the company’s total Ebitda would continue to rise. Iron ore volumes to improve with the removal of restrictions on exports. Ore production from Liberia has started and the company exported its first batch of shipment in Jan’23. The global macro environment is likely to weigh on any improvement in LME prices. The China opening is expected to support demand and prices, but fears of recession in Europe continue to raise concerns.