Q2 Results: Vedanta’s Profit Declines On Lower Margins

Vedanta Ltd.’s profit for the quarter-ended September declined, while its operational performance fell well short of estimates.

Net profit of the miner declined 34.3 percent year-on-year to Rs 1,343 crore in the July-September quarter, according to its exchange filing. That compares with a consensus estimate of Rs 1,359 crore by analysts tracked by Bloomberg. The company made a one-time gain of Rs 320 crore during the period.

The company’s revenue rose 5.2 percent on a yearly basis to Rs 22,705 crore. Earnings before interest, tax, deprecation and amortisation fell 8 percent to Rs 5,208 crore during the period. That’s well below Rs 5,777-crore estimated. The operating margin, however, contracted 340 basis points over the last year to 22.9 percent—the Bloomberg estimate being 28 percent.

The company’s operating profit from copper business plunged to Rs 2 crore from Rs 399 crore a year ago due to the permanent shutdown of its 250,000-tonne smelter in Thoothukudi in May. Sterlite Copper, a subsidiary of Vedanta, had filed an appeal before the National Green Tribunal challenging the Tamil Nadu government’s order. Hearings are on and further action will be taken once the tribunal submits its report by November, Chief Executive Officer P Ramnath had earlier told BloombergQuint.

Vedanta, in a separate filing, announced an equity interim dividend of Rs 17 apiece amounting to Rs 6,320 crore. The record date for the payment of dividend is Nov. 10.

Shares of Vedanta closed flat at Rs 211 apiece ahead of the earnings announcement. The stock declined 31.8 percent so far this year compared with a 4.8 percent gain in the BSE Sensex.