Mining and Oil & Gas exploration major Vedanta reported a consolidated attributable profit after tax (PAT) of Rs 4,644 crore for the quarter ended September 30, increasing 486% from Rs 792 crore reported in the corresponding period last year and increasing by 8% compared to an attributable net profit of Rs 4,280 crore in the previous quarter ended June 30, 2021.
The revenues came in higher by 44% at Rs 30,048 crore for the quarter, compared to Rs 20,804 crore in the same period last year. On a sequential basis, the consolidated revenue is higher by 7% from Rs 28,105 crore.
Higher revenues were primarily supported by improved commodity prices and higher volumes across businesses, partially offset by lower sales volume at Zinc India, copper and TSPL, the company said.
Commenting on the performance of the company, Sunil Duggal, Chief Executive Officer, said, “We continued our strong growth momentum this quarter as well, reporting record quarterly and half-yearly revenue and EBITDA. We witnessed steady volume performance across business segments, and sustained margins benefitting from high commodity prices despite a challenging cost environment.”
All the businesses of the company returned strong operational performance this quarter. Production across businesses grew in healthy double digits on a yearly basis except Zinc production, which grew by 4% and Oil & Gas which was flat. Record quarterly production was recorded in Aluminium, Zinc, Iron Ore and Ferrous Chrome businesses. Its copper business continues to remain offline and the company is making efforts to legally start the same.
Alumimium and Alumina production was up 21% and 11% y-o-y respectively, Zinc India production was up 4% while Zinc International was up 10% on a yearly basis. Iron Ore and Steel production was up 12% each on a y-o-y basis.
The company witnessed a steep rise in the cost of production of Zinc in both its India and international operations. Cost of production in India was $1,124/ton (+22% y-o-y) while international was $1,379/ton (+11% y-o-y).
Earnings before interest, tax and depreciation (EBITDA) for the quarter came in at Rs 10,582 crore, which is a robust y-o-y growth of 62%. This was primarily due to higher commodity prices and increased volume off-take at Aluminium business. However, this was partially offset by lower sales volume at Zinc business and higher cost of production impacted by input commodity inflation.
On a quarterly basis, EBITDA was higher by 5%, due to improved commodity prices, partially offset by lower volumes at Zinc & Iron Ore business, and higher cost of production impacted by input commodity inflation.
The company posted robust EBITDA margins of 40% during the quarter compared to 36% in the same period of last year.
Finance cost for the company was lower by 19% y-o-y and by 10% q-o-q because of lower average borrowings during the quarter. However, the company earned lower interest on its investments during the quarter due to mark-to-market movement and change in investment mix.
Cash and Debt
The company holds strong cash and equivalents on its books to the tune of Rs 30,650 crore and was able to reduce its gross debt by Rs 11,719 crore compared to same period last year by deleveraging at Zinc and Aluminium business.
The strong cash position helped the company to reduce its net debt by Rs 7,232 crore from last year.
Duggal commented on the ESG compliance saying, “Vedanta has set its sights on becoming a leader in terms of our ESG performance in the metals & mining sector, with a strong commitment towards achieving Net-Zero Carbon by 2050 or sooner, increasing workplace diversity, and a commitment to improve the quality of life of more than 100 million women & children.”The stock closed at Rs 304.00 today, up Rs 3.15 (+1.05%) from its previous day’s close. This year the stock has moved up robustly on the back of higher commodity prices and is up 218% from its last year’s levels, up 88% in this financial year, up 5% and 4% in the past 3 months and 1 month respectively.