Q2 Results: Vedanta’s Profit Beats Estimates On Deferred Tax Gain
Vedanta company’s signage on a building in India. (Photographer: Adeel Halim/Bloomberg News)

Q2 Results: Vedanta’s Profit Beats Estimates On Deferred Tax Gain

Vedanta Ltd.’s quarterly profit rose, beating analysts’ estimates, on the back of a deferred tax gain and higher other income.

The mining conglomerate’s net profit rose 60.7 percent year-on-year to Rs 2,158.7 crore in the quarter ended September, it said in an exchange filing. Analysts tracked by Bloomberg had expected the profit to be at Rs 680 crore. The company accounted for a deferred tax gain of Rs 1,891 crore during the period as the firm opted for a lower tax rate announced by Finance Minister Nirmala Sitharaman to stimulate economic growth from a six-year low.

Revenue declined 3.3 percent to Rs 21,958 crore, surpassing the estimate of Rs 19,799.90 crore. Other income, the company said, rose 49 percent year-on-year to Rs 856 crore.

Operational performance, was however, in line Bloomberg consensus estimates. Earnings before interest, tax, deprecation and amortisation fell 13.8 percent to Rs 4,423 crore, while operating margin contracted 250 basis points to 20.1 percent compared with the same period last year.

Operational performance was affected by decline in forward prices of zinc and aluminium. Zinc forward prices fell 9 percent over the previous year to $2,529 on London Metal Exchange, while aluminium forward prices slumped 16.5 percent in the same period.

The oil and gas segment’s revenue dropped 10 percent to Rs 1,817 crore. The domestic copper division posted an operating loss of Rs 105 crore as the smelter plant in Tamil Nadu remained closed.

Other Highlights

(Year-on-year)

  • Net debt declined close to 30 percent sequentially to Rs 20,081 crore as on Sept. 30.
  • Aluminium business reported an operating loss of Rs 114 crore compared with a profit of Rs 337 crore.
  • Steel division operating profit fell 90 percent to Rs 18 crore.
  • Profit from zinc international business jumped 13 times to Rs 207 crore.

Shares of Vedanta fell as much as 3.2 percent after the earnings announcement compared with a 0.28 percent gain in the NSE Nifty Index.

Q2 Results: Vedanta’s Profit Beats Estimates On Deferred Tax Gain
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