Vedanta drops after reporting dismal Q2 numbers

Vedanta dropped 0.53% to Rs 104.15 at 15:30 IST on BSE after consolidated net profit fell 39% to Rs 1933 crore on 16% drop in net sales to Rs 16349 crore in Q2 September 2015 over Q2 September 2014.

The result was announced during market hours today, 27 October 2015.

Meanwhile, the BSE Sensex was down 108.52 points, or 0.4%, to 27,253.44.

Huge volumes were witnessed on the counter. On BSE, 22.51 lakh shares were traded in the counter, compared with an average volume of 14.14 lakh shares in the past one quarter.

The stock hit a high of Rs 106.40 and a low of Rs 102.10 so far during the day. The stock hit a 52-week high of Rs 263.55 on 5 November 2014. The stock hit a 52-week low of Rs 76.70 on 25 August 2015.

Vedanta's consolidated attributable net profit before exceptional items fell 41% to Rs 974 crore on 16% decline in net sales to Rs 16349 crore in Q2 September 2015 over Q2 September 2014.

Vedanta attributed the decline in top line growth in Q2 September 2015 to fall in crude oil and metal prices, partially offset by higher volumes at Zinc India, Oil & Gas and TSPL as well as rupee depreciation.

The consolidate earnings before interest, taxation, depreciation and amortization (EBITDA) fell 35% to Rs 4113 crore in Q2 September 2015 over Q2 September 2014. EBITDA margin dropped to 32% in Q2 September 2015 as against 45% in Q2 September 2014.

EBITDA was lower due to a steep fall in crude oil and metal prices and premia, partially offset by improvements in volumes and cost, supported by currency depreciation and District Mineral Foundation (DMF) write-back. During the quarter, the Government of India notified the contribution towards DMF at 30% of royalty for existing mining leases, payable from 12 January 2015. Accordingly, the earlier excess provision of Rs 140 crore for DMF at Zinc India was reversed during the quarter.

With regard to the proposed merger of Cairn India with Vedanta, the stock exchanges have provided their 'No Objection' to the proposed merger vide their Observation Letters dated 10 September, 2015. The validity of the 'Observation Letter' is six months, within which the Scheme of amalgamation is required to be submitted to the High Court, Vedanta said.

Vedanta said that the board of directors declared interim dividend of Rs 3.50 per share for the year ending 31 March 2016 (FY 2016).

Vedanta (formerly Sesa Sterlite) is a diversified natural resources company. The company produces zinc, lead, silver, copper, iron ore and aluminium.

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