Vedanta Aluminium Metal, which recently debuted on the stock exchanges following its spin-off from Vedanta, reported a significant rise in its share price by nearly 2% on Friday morning, trading at Rs 465 apiece. This uptick follows the company's announcement of a 46% year-on-year surge in revenue from operations, reaching Rs 21,393 crore for the April-June quarter of FY27.
The company's total income rose by more than 46% year-on-year to Rs 21,702 crore, while total expenses increased by over 7.5% year-on-year to Rs 12,870 crore during the same period. Vedanta Aluminium's net profit margin more than doubled to 31% in Q1 FY27 from 15% in Q1 FY26, with its operating profit margin improving to 45% from 26% in the corresponding quarter last year. The company's net worth surged by more than 86% year-on-year to Rs 30,441 crore at the end of the first quarter.
In conjunction with its Q1 results, Vedanta Aluminium Metal announced its first interim dividend of Rs 8 per share on a face value of Re 1 for FY27, with August 5 set as the record date for determining shareholders' eligibility for the dividend.
“The company’s Q1 performance came in largely in line with estimates, with cost of production falling by $20 per tonne despite the impact of the Middle East conflict.”
CLSA
Brokerages have responded positively to Vedanta Aluminium's performance. CLSA maintained an 'Outperform' rating with a target price of Rs 540, citing the company's Q1 performance as largely in line with estimates. Citi issued a 'Buy' call with a target price of Rs 525, noting that the company's EBITDA exceeded estimates by 4%. Nuvama also issued a 'Buy' call with a target price of Rs 540, while Emkay highlighted the company's strong Q1 earnings and maintained a 'Buy' call with a target price of Rs 550.
Vedanta Aluminium was the only large-cap stock among the four companies spun off from Vedanta under its mega demerger, debuting in June at Rs 522 apiece on the NSE. The shares have gained around 6% in one week and 3% in a month, although they are overall down more than 7% since listing.
“We expect Q2 FY27 EBITDA to be 5-8% lower QoQ due to lower aluminium price and higher CoP, partly offset by higher volume.”
Nuvama
Background
Vedanta Aluminium's strong Q1 performance comes on the heels of its recent spin-off from Vedanta and subsequent stock market debut. The company's strategic initiatives, including capacity expansion and cost reduction measures, have positioned it well for future growth. Analysts are optimistic about its potential, given the rising aluminium prices and operational efficiencies.
Looking ahead, analysts expect Vedanta Aluminium's Q2 earnings to soften due to cost-related headwinds and lower aluminium prices. However, the commencement of captive bauxite and coal mines, along with the BALCO expansion, is anticipated to drive future margin expansion.
