Vedanta Q1 Results: Net Profit Falls But Beats Estimates

Vedanta Ltd.'s profit fell in the pandemic-marred quarter but managed to beat estimates, aided by one-offs.

Net profit of billionaire Anil Agarwal-controlled mining conglomerate dropped 23% year-on-year to Rs 1,033 crore in the three months June, according to an exchange filing. That compares with the Rs 37-crore consensus estimate of analysts tracked by Bloomberg.

The company's power and fuel charges for the quarter are net of reversal of Rs 395 crore on account of reduction in floor and forbearance prices of renewable energy certificates, it said.

Vedanta's revenue, too, dropped 25% over the year ago to Rs 15,973 crore, but was in line with the estimated Rs 16,228 crore. The company's steel division exported billets—used for rolling of TMT rebars and various other structural steel products—to China during the lockdown, cushioned the top line.

Its earnings before interest, tax, depreciation and amortisation fell 23% year-on-year to Rs 3,993 crore in the reported quarter, compared with the Rs 3,135-crore forecast. That included the power and fuel expense one-off. Adjusting for the one-offs, operating profit stood at Rs 3,598 crore—the lowest since first quarter of FY17.

The company's Ebitda was also cushioned by lower cost of production of its aluminium division.

Vedanta Resource Plc. is looking to delist its main India unit as part of chairman Agarwal's plan to simplify his investments across the complex multi-tiered corporate structure.

Vedanta has interests in zinc, aluminum and oil and gas, all of which have been hit by volatile prices and concerns about weak demand for metals and hydrocarbons because of the coronavirus pandemic. Besides, the Madras High Court rejected the company's plea challenging the closure of its copper smelter unit in Thoothukudi, Tamil Nadu that accounted for nearly half of India's output, denting the group's revenue.