Vedanta Reports Highest Profit In Last Seven Quarters
Vedanta beats estimates in the second quarter
Vedanta Ltd., the flagship firm of Anil Agarwal’s Vedanta Resources Plc, reported a gain of 12 percent in its consolidated net profit, for the quarter ended September. It’s highest figure in seven quarters.
Net profit came in at Rs 1,252.13 crore from Rs 1,119.2 crore a year ago. This despite net sales falling marginally by 4 percent to Rs 16,584 crore from Rs 17,317 crore in the same quarter an year ago. Revenue also dipped 4 percent on account of lower oil and copper prices and lower volumes at Hindustan Zinc Ltd. and Cairn India Ltd.
Both the topline and the bottomline beat the Bloomberg poll estimate of 12 analysts who had pegged the net sales figure at Rs 15,741.2 crore and net profit at Rs 962 crore for the second quarter.
Vedanta posted earnings before interest, taxes, depreciation and amortisation (EBITDA) of Rs 4,667 crore in the previous quarter, up 8.5 percent from Rs 4,302 crore in the same period last year. EBITDA margin expanded by 328 basis points to 27.82 percent led by higher metal prices, improved cost efficiency and volume ramp up in the power segment.
Finance costs went up marginally higher by Rs 57 crore on a quarter-on-quarter basis, primarily driven by capitalization of new capacities at the Aluminium and Power businesses and an increase in the proportion of INR borrowings. Other income increased by Rs 137 crore quarter-on-quarter due to higher mark-to-market gains on investments in the quarter.
Total debt increased marginally by Rs 275 crore during the quarter to Rs 66,794 crore. 78 percent of the total debt is Rupee denominated. The gross debt figure also comprises of long-term loans worth Rs 61,537 crore and short-term loans of Rs 5,257 crore.
Segment Break-up
In the second quarter, iron ore business segment was the best performer which saw a 6.6 times jump in its revenue. Revenue stood at Rs 529 crore with an earnings before interest and tax (EBIT) margin of 12 percent.
Copper segment saw its revenue decline by 7 percent to Rs 4,953 crore due to a fall in prices. Zinc business in India fell 6 percent to Rs 3,269 crore while the international business rose marginally to Rs 684 crore.
Revenue from the aluminium business rose 20 percent to Rs 3,288 crore with a positive EBIT margin of 5.2 percent led by higher prices.
Power business revenue rose 10 percent while the margins expanded by 338 basis points to 16.43 percent.
Vedanta also declared an interim dividend of Rs 1.75 per share. The company will also be looking to raise as much as Rs 300 crore through issue of non-convertible debentures.
The management also sounded confident on completing the Cairn India merger, which has finally got the shareholders’ nod with the company’s CEO, Tom Albanese saying all the formalities of completing the process are on track.