Vedanta Q4 Review - Earnings Outlook Remains Strong: Motilal Oswal
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Motilal Oswal Report
Vedanta Ltd. reported better-than-expected Q4 FY21 results, with Ebitda up 17% QoQ to Rs 90.4 billion (our estimate Rs 87.6 billion), at the highest ever.
With higher commodity prices in the near term, the earnings outlook remains strong.
We raise the company’s FY22E/FY23E Ebitda estimate by 17%/8%, factoring in higher commodity prices.
Given the promoter’s intent to increase the stake and loans given to the parent by the company, we believe potential corporate actions could be the key drivers of the stock price.
Moreover, high leverage and scheduled debt repayments at the parent Vedanta Resources Ltd. remain an overhang.
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