Vedanta Ltd. reported an unexpected loss for the second quarter.
The metals and mining giant reported a loss of Rs 915 crore in the quarter ended September, according to an exchange filing on Saturday. That compares with a consensus profit estimate of Rs 692.3 crore by analysts tracked by Bloomberg.
The loss was on account of an exceptional tax charge of Rs 6,128 crore as it shifts to the new tax regime.
Vedanta Q2 FY24 Highlights (Consolidated, YoY)
Revenue up 6.3% at Rs 38,945 crore vs Rs 36,654 crore (Bloomberg estimate: Rs 31,868.1 crore).
Ebitda up 49.1% at Rs 11,479 crore vs Rs 7,699 crore (Bloomberg estimate: Rs 6,371.9 crore).
Margin at 29.47% vs 21% (Bloomberg estimate: 20%).
Reported loss of Rs 915 crore vs profit of Rs 2,687 crore (Bloomberg estimate: Rs 692.3 crore of profit).
Revenue from operations includes a Rs 4,761crore gain on account of a favourable arbitration award. The Arbitration Tribunal had dismissed the government's contention regarding terms of the production sharing contract with Vedanta for the Rajasthan Oil Block, while also allowing the company to claim recovery of exploration cost.
The surge in operating profit was also driven by lower input costs. Power and fuel costs fell 28.6% YoY to Rs 5,856 crore, while cost of materials consumed remained flat at Rs 10,897 crore.
The conglomerate reported a loss, despite a 49% rise in Ebitda due to an exceptional tax expense of Rs 6,128 crore as it shifts to the new tax regime from FY23 onwards. Minimum Alternate Tax balance of Rs 7,763 crore was charged, while lower tax expenses in FY23 under the new regime resulted in a credit of Rs 1,635 crore.
The company also recorded an exceptional gain of Rs Rs 1,179 crore for reversal of previously recognised impairment on equipment after the arbitration award.
Segmentwise Ebitda (YoY)
Oil and gas unit witnessed a 2.9 times surge to Rs 5,860 crore.
Domestic zinc, lead, and silver segments registered a 29% decline to Rs 3,073 crore.
Aluminum unit saw 2.8 times growth to Rs 1,967 crore.
Iron ore segment rose 50% to Rs 320 crore.
Zinc International fell 51% to Rs 289 crore.
Power division's operating profit stood at Rs 248 crore, up 20%.
Copper registered an operating loss of Rs 62 crore.
The surge in oil and gas profit was on account of favourable arbitration award mentioned above, resulting in a gain of Rs 4,761 crore to its revenue from operations.
Aluminum's cost of production fell 25% YoY, while alumina's costs dropped 20% YoY on account of lower input costs. This resulted in the surge in profit in its aluminum segment, supported by a 2% YoY increase in aluminum production at 594 kilo tonne.
Zinc India's operating profit declined on account of lower realisations, especially for zinc, partially offset by a 10% YoY decline in costs. A 2% YoY decline in refined metal production to 241 kilo tonne also contributed to lower profit.
Other Highlights
During the quarter, Vedanta announced a demerger of the entity into six to unlock value. The company will demerge aluminium, oil and gas, power, steel, and metal businesses into separate listed entities, according to its exchange filing. The transaction is planned to be a simple vertical split, it said. Vedanta will continue to operate the display and semiconductor manufacturing units under itself.
Vedanta has announced a growth expansion project for its subsidiary Ferro Alloys Corp. at a cost of Rs 2,650 crore. The project, subject to approvals, will increase its capacity to 450 kilo tonne per annum from 150 KTPA. The project is expected to be completed in two years, with 70% being funded via term loans and 30% through internal accruals and equity infusion.
Shares of Vedanta closed 1.33% higher at Rs 232.2 apiece before the results were announced on Friday, as compared with a 0.48% gain in the benchmark NSE Nifty 50.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
