Vedanta Q2 PAT tumbles 62% YoY to Rs 824 cr

The diversified natural resources company posted a 62% decline in consolidated net profit to Rs 824 crore in Q2 September 2020 as against Rs 2,158 crore in Q2 September 2019.

The company's net sales fell 4.3% to Rs 20,804 crore in Q2 September 2020 from Rs 21,739 crore reported in Q2 September 2019. Vedanta said revenue was lower on account of lower volume at oil & gas business and lower commodity prices which were partially offset by higher volumes at Zinc India business, and rupee depreciation. The result was announced on Saturday, 6 November 2020.

Profit before tax surged 258% to Rs 4,013 crore in Q2 September 2020 over Q2 September 2019. Tax expense for Q2 FY21 was Rs 2,370 crore compared to Rs 510 crore in Q1 FY21 & tax credit of Rs 1,609 in Q2 FY20. Normalised tax rate (excluding tax on dividend from Zinc India business) for the quarter is 29%, compared to 20% in Q1 FY21, driven by change in profit mix amongst businesses.

Consolidated EBITDA jumped 45% year on year to Rs 6,531 crore in Q2 September 2020 from Rs 4,497 crore in Q2 September 2019. EBITDA was higher due to higher volume at Zinc India business, subdued input commodity prices, lower cost of production at Aluminium, Steel & Zinc business and rupee depreciation. EBITDA margin improved to 36% in Q2 September 2020 from 25% in Q2 September 2019.

The company's said it had a robust balance sheet with cash and cash equivalents at Rs 35,569 crore in Q2 September 2020. Gross debt was at Rs 62,759 crore on 30 September 2020, higher by Rs 4,191 crore as compared to 30 June 2020 mainly due to temporary borrowing at Zinc India. Net debt was at Rs 27,190 crore on 30 September 2020, higher by Rs 92 crore as compared to 30 June 2020.

In October 2020, Vedanta's voluntary delisting bid failed after it could not get the minimum number of bids required from its minority shareholders to take it private. The promoters had sought to buy out 169.73 crore shares or 47.67% stake held by the public to delist the firm.

Vedanta, a subsidiary of VRL, is one of the world's leading diversified natural resource companies with business operations in India, South Africa, Namibia and Australia.

Shares of Vedanta jumped 4.06% to Rs 98.60 on Monday. The scrip traded in the range of Rs 94.6 to Rs 99.1 during the day.

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