Vedanta Q4 Results
CMP: 105
Total income from operations 20,382 Cr
25,096 Cr (-18.76%) YoY | 22,007 Cr (-7.32%) QoQ
Year ending revenue: 86,965 Cr Vs. 96,066 Cr (-9.41%)
Net Profit of (15,269) Cr
4,104 Cr (-472.07%) YoY 3,806 Cr (-501.23%) QoQ
Year ending Net profit: (8,259) Cr Vs. 13,560 Cr (-160.91%)
EPS (in Rs.) (33.82)
7.04 YoY | 6.31 QoQ
Year ending EPS: (18.00) Vs. 18.98
View: Result is below expectation and declind. YoY and QoQ revenue declined and company posted huge losses due to booked exceptional loss in the tune of INR 17,132 Cr on account of impairment losses for Oil & Gas, Copper and Iron Ore business triggered majorly due to significant fall in crude oil prices.
**Business Updates & Highlights**:
Q4FY20 EBITDA is around INR 4,844 Cr Vs. 6,330 Cr in Q4FY19 Vs. 6,530 Cr in Q3FY20 therefore declined by 23% in YoY and declined by 34% in QoQ. FY20 EBITDA is around INR 21,060 Cr Vs. 24,012 Cr in FY19 therefore declined by at 12%.
Q4FY20 EBITDA margin is around 28% Vs. 31% in Q4FY19 Vs. 34% in Q3FY20. FY20 EBITDA margin is around 29% Vs. 30% in FY19.
Revenue for Q4 FY2020 was at ₹ 19,513 crore, lower by 8% sequentially, primarily due to lower commodity prices further impacted by COVID-19, lower volume at Aluminium business and lower power sales at TSPL.
**Key business updates in Q4FY20**:
Zinc India: MIC production up 6% q-o-q. Metal Production up 1% q-o-q.
Zinc International: Overall Production down 5% q-o-q. Gamsberg production at 30kt.
Oil & Gas: Gross Production at 162 kboepd.
Aluminium: Aluminium Cost down 14% q-o-q. Lanjigarh cost down 4% q-o-q.
Electrosteel Steels: Production marginally up 1% q-o-q. Margin up 132% q-o-q.
Iron Ore: IOK Sales at 1.6 Mt up 8% q-o-q. Pig Iron Production down 17% q-o-q.
**Delisting Notice**
On May 12, 2020, the Promoter expressed its intention to voluntarily delist the Equity Shares in accordance with Delisting Regulations and highlighted an Indicative Offer Price of INR 87.5 per Equity Share (determined in accordance with the Delisting Regulations). On May 18, 2020, the board of directors of Company approved the proposal and authorised the Company, amongst other things, to seek shareholders’ approval with respect to the proposal.
**Board of Directors has declared Interim dividend for the F.Y. 2019-20 of Re 1.25 per equity share and paid in March 2020 which is final dividend for FY19-20
**Financial**
ROE and ROCE is around 15% and 11% respectively and book value per share is around INR 168 and share is currently trading at 0.6x of its book value. Promoter holding is around 50.1% in the company which is good and stable. FIIs and Mutual fund hold around 15.1% and 10.9% in the company. Cash and cash equivalent from operating activities as of March 2020 is around INR 19,298 Cr Vs. 23,754 Cr as of March 2019. Net debt / EBITDA is around 1x as of March 2020 as compare to 1.1 in March 2019. Net Debt at INR 21,273 crores, decreased by INR 5,683 crores compared to 31st March 2019
Position: Share strong support price is INR 84/72. Long term investor based on their risk appetite can continue with the company
Share View : Share price high 180 (52 week) and now 105. Vedanta Limited is a mining company based in India, with its main operations in iron ore, gold and Aluminium mines in Goa, Karnataka, Rajasthan and Odisha
Opportunities: Vedanta consolidated has great set of asset its including subsidiaries which has huge asset base namely Hindustan Zinc (Price: INR 180, dividend: INR 16.5), Electrosteel steel, Bharat aluminium, Sesa Goa, Bellary Steel, Sterlite Ports etc.
Risk: Posted huge losses in the tune of INR 17K Cr due to impairment of losses of Oil & Gas business mainly for huge crude fall. Highly volatile current environment can further correct the Q1 and Q2 as well.
Sources:
Various publications
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