Vedanta Ltd consolidated Q3 net profit at Rs 3,017 crore, up 35% YoY

Net sales up on higher commodity prices, rupee depreciation, increased volumes at Zinc India and iron ore business

Anil Agarwal-led Vedanta Limited reported consolidated net profit of Rs 3,017 crore in the December quarter, up 35 percent from same period last year on the back of higher revenues.

The company’s net sales in the period under review stood at Rs 22,498 crore, up 6.4 percent from the corresponding period last year as company’s aluminium and zinc India business lent firm support to the topline.

Net sales were up on higher commodity prices, rupee depreciation and increased volumes at Zinc India and iron Ore business, partially offset by lower volumes at Oil and Gas business, lower power sales in Talwandi SAbo Power Limited, said the company release today.

"Our businesses stayed resilient in the quarter amidst uncertain market environment reporting the highest EBITDA in last two years. We continue to ramp up across the Zinc and Iron & Steel verticals along with successful project delivery in the Oil & Gas vertical. Aluminium business has had yet another exemplary quarter as it continued the momentum of cost rationalisation from improved integration and systemic improvements," Sunil Duggal, chief executive officer at Vedanta was quoted as saying.

The company reported earnings before interest, taxes, depreciation and ammortisation (EBITDA) of Rs 7,695 crore in the quarter gone by, up 18 percent from same period last year. The EBITDA margin in the period under review stood at 39 percent as against 34 percent in the corresponding period last year.

The company's finance cost for Q3 FY21 was at Rs 1,321 crore, up 7 percent year-on-year, mainly on account of increase in gross borrowings and lower capitalisation of interest cost.

The company's gross debt at Rs 62,412 crore as on Dec 31, 2020, was up by Rs 3,225 crore as compared to March 31, 2020, majorly on account of temporary borrowing at Zinc India, said the company.

"Our balance sheet continues to remain strong with a consolidated Net Debt / EBITDA ratio of 1.5X with improving debt maturity profile. Yet we target to reduce net debt by above Rs 5,000 crore in the coming quarter," G.R. Arun Kumar, chief financial officer at Vedanta was quoted as saying.

Meanwhile, the net debt stood at Rs 35,357 crore as on December 31, 2020, higher by Rs 14,084 crore as compared to March 31, 2020, on account of dividend payment and intercompany loan to Vedanta Resources Limited, offset by positive cash flow.

"We have cash and cash equivalents of Rs 27,055 crore. The company invests in high quality debt instruments as per the Board approved policy. The portfolio is rated by CRISIL, which has assigned a rating of “Tier-I” (implying Highest Safety) to our portfolio," the company statement said.

For the current fiscal, the company has chalked out a capex of about Rs 600 crore. Of this, the company has used its capex of Rs 350 crore and is expected to end the fiscal with capex spent at Rs 500 crore.