Vedanta gains after trimming losses in Q4 results

Vedanta rose 3.2% to Rs 103.20 at 10:00 IST on BSE after the company reported fall in consolidated losses in Q4 March 2016 compared with Q4 March 2015.

Vedanta announced the fourth quarter results after trading hours yesterday, 28 April 2016.

Meanwhile, the S&P BSE Sensex was up 145.24 points or 0.57% at 25,748.34.

On BSE, so far 6.33 lakh shares were traded in the counter as against average daily volume of 27.12 lakh shares in the past one quarter. The stock hit high of Rs 103.90 and low of Rs 100.50 so far during the day. The stock had hit a 52-week high of Rs 233.45 on 11 May 2015. The stock had hit a 52-week low of Rs 58.10 on 12 February 2016. The stock had outperformed the market over the past one month till 28 April 2016, rising 13.57% compared with Sensex's 2.55% gains. The scrip had also outperformed the market in past one quarter, gaining 48.7% as against Sensex's 4.63% gains.

The large-cap company has equity capital of Rs 296.47 crore. Face value per share is Re 1.

On a consolidated basis, Vedanta posted net loss of Rs 11181 crore in Q4 March 2016, lower than net loss of Rs 19228 crore in Q4 March 2015. Net sales fell 11% to Rs 15829 crore in Q4 March 2016 over Q4 March 2015. Net profit before exceptional items surged 89% to Rs 955 crore in Q4 March 2016 over Q4 March 2015. Non-operational income or the so-called other income surged 3485.68% to Rs 1289 crore in Q4 March 2016 over Q4 March 2015. Vedanta said that the non-operational income income was significantly higher in Q4 March 2016 largely due to timing differences wherein income earned on certain investments are recognized at maturity. During the quarter, a substantial portion of investments were liquidated at Hindustan Zinc on account of an announcement of special dividend and at Cairn India.

Earnings before interest, tax, depreciation and amortization (EBITDA) dropped 13% to Rs 3508 crore in Q4 March 2016 over Q4 March 2015. The fall in EBITDA in Q4 March 2016 was primarily due to a steep fall in oil and metal prices and premia; partly offset by cost saving initiatives and strong volumes, Vedanta said. Revenues in Q4 March 2016 were 11% lower on account of the fall in oil and metal prices, which were partially offset by higher volumes, the company said.

Exceptional items in Q4 March 2016 totalled Rs 12312 crore, of which Rs 12304 crore pertained to impairment. The impairment was triggered by the continued fall in oil prices during the year. Further, in light of the declining iron ore prices, both the acquisition goodwill and carrying value of the exploratory assets in West Africa (Western Cluster, Liberia) have also been impaired to the extent of Rs 1490 crore. Additionally, certain unused fixed assets and goodwill at copper mines of Tasmania and Bellary, Karnataka (Iron Ore) incurred an impairment charge of Rs 456 crore.

Vedanta is a diversified natural resources company, whose business primarily involves producing oil & gas, zinc - lead - silver, copper, iron ore, aluminium and commercial power. The company has a presence across India, South Africa, Namibia, Australia, Ireland, Liberia and Sri Lanka. Vedanta, formerly Sesa Sterlite is the Indian subsidiary of Vedanta Resources Plc, a London-listed company.

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