Vedanta Q1 Results: Stock falls after profit drops, margin narrows

Anil Agarwal-owned mining conglomerate Vedanta Ltd. reported its June quarter results on Thursday, July 31. A majority of the result is already in the price as nearly 45% of the company’s Earnings Before Tax (EBIT), comes from its subsidiary Hindustan Zinc, which has already reported results.Vedanta owns over 60% stake in Hindustan Zinc.

On a consolidated basis, Vedanta’s net profit fell 12% from last year to ₹3,185 crore from ₹3,606 crore last year.

Revenue for the quarter increased by 5.8% on a year-on-year basis to ₹37,824 crore. The topline for the same quarter last year stood at ₹35,764 crore.

Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the quarter remained unchanged at ₹9,918 crore.

EBITDA margin for the quarter narrowed by 160 basis points from last year to 26.2% from 27.8% last year.

The company said that its net-debt to EBITDA stood at 1.3 times. Vedanta’s Lanjigarh refinery recorded its highest ever Alumina production at 587 kt, which was a growth of 9% from last year.

Net debt at the end of the June quarter stood at ₹58,220 crore.

Vedanta’s Aluminium business EBITDA stood at ₹4,462 crore, which was higher than the Kotak Institutional Equities estimate of ₹4,172 crore.

The Oil and Gas business EBITDA stood at ₹1,268 crore, which is also higher than the ₹1,074 crore projection from Kotak, while Zinc International’s EBITDA stood at ₹422 crore, which was also better than the ₹359 crore estimate.

Shares of Vedanta have slumped to the lows of the day after the earnings announcement, currently trading 1.8% lower at ₹426.9.