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Vedanta sees QoQ decline in profits and revenue; stock ends in the green

Metals and mining giant Vedanta reported consolidated net profit of Rs 4,421 crore for the June quarter 2022, up 4.66% year-on-year (YoY). But that was lower than Street’s estimate of Rs 4,572 crore, according to Bloomberg. Sequentially, Vedanta’s net profit declined by 23.7% from Rs 5,799 crore.

The company’s consolidated revenue for the first quarter was Rs 38,251 crore, up 36.10% year-on-year, supported by higher sales volume across all businesses, pricing raw materials and strategic hedging gains. Bloomberg consensus estimates had pegged the revenue at Rs 37,698 crore. But sequentially, revenue was down 3% from Rs 39,342 crore.

Vedanta’s profit before depreciation and amortization of interest taxes (Ebitda) was Rs 10,741 crore in the first quarter, up 7% from the Rs 10,032 crore reported a year ago. But the figure was down 22% from the March quarter, when Ebitda stood at Rs 13,768 crore. Bloomberg consensus estimates had pegged Vedanta’s Q1 Ebitda at Rs 12,292 crore.

The company said that while operating performance improved in the June quarter, the gains were partially offset by higher production costs amid rising input cost inflation. Ebitda margin was 32% in the first quarter compared to 41% one year and 39% in the March quarter.

Vedanta is in the business of metals, such as zinc, aluminum, copper, iron ore and steel, excluding oil and gas and power generation.

On a media call, Sunil Duggal, CEO of Vedanta, said coal ties were improving and this was helping ease supply constraints in the market. “Going forward, the easing of commodity prices will ease cost pressure to a substantial level.”

Vedanta’s consolidated net debt stood at Rs 26,799 crore in the June quarter, compared to Rs 24,414 crore for the quarter ended March 2022.

On BSE, Vedanta shares settled at Rs 245.50 each, up 0.80% from the previous day’s close. Based on Thursday’s close, the market capitalization of Vedanta was Rs 91,257.18 crore.