A miner walks along rail tracks in an underground tunnel at the 296 meter level at the Nchanga copper mine, operated by Vedanta unit Konkola Copper Mines Plc (Photographer: Waldo Swiegers/Bloomberg)  

Anil Agarwal’s Vedanta Delivers In Q2 Aided By The Metals Rally 

Vedanta Ltd.’s second earnings largely matched analyst estimates as metal prices rallied to multi-month highs.

Net profit of the Anil Agarwal-led company rose 47 percent year-on-year to Rs 2,091 crore for the July-September quarter, the company said in an exchange filing in India. The increase was led by higher metal prices and higher production volumes of zinc, aluminium but partially offset by currency appreciation, and lower volumes of oil and gas.

The bottom line marginally missed the Rs 2,440 crore estimated by Bloomberg despite an exceptional gain of Rs 186 crore. These gains relate to reversal of royalty at Rs 291 crore at Zinc India, an arm of Vedenta’s subsidiary Zinc India. Nevertheless, this was offset by Rs 109 crore of exploratory assets write off in the oil and gas business.

Revenue rose 36 percent to Rs 21,590 crore, in line with estimates.

“We expect H2 of this fiscal year to be more robust with the continuing production ramp up,” Kuldip Kaura, chief executive officer at Vedanta said in the filing.

The operational performance too was in line Bloomberg consensus estimates. Earnings before interest, tax, deprecation and amortisation rose 21.3 percent to Rs 5,669 crore while Ebita margin contracted to 26.25 percent from 29.5 percent.

Production Volumes

  • Production of silver and refined zinc-lead metal rose 27 percent to 230 kilo tonnes.
  • Aluminium production stood at a record 401 kilo tonnes.
  • Copper cathode production stood at a record 106 kilo tonnes.

Capex Guidance Lowered

Citing higher input prices and a stressed supply chain for coal, Vedanta revised its capital expenditure guidance for the financial year lower to $1.1 billion compared to its previous guidance of $1.2 billion, according to an investor production.

Strong Balance Sheet

The company’s gross debt reduced by Rs 11,466 crore since March 2017 while the net debt-to-ebitda 0.6 times was amongst the lowest across Indian and global peers. Its total cash and liquidity investment stood at Rs 40,206 crore