Vedanta Q3 profit grows 27%, revenue jumps 50% but margin shrinks

Metals and mining giant Vedanta Ltd Friday reported a 27% increase in consolidated net profit for the third quarter, helped by higher sales and improved commodity prices.

Profit after tax for the quarter ended Dec. 31 rose to Rs 5,354 crore from Rs 4,224 crore a year earlier, the billionaire Anil Agarwal-led company said. Profit exceeded analysts’ forecasts.

Profit attributable to shareholders before exceptional items grew at the same pace to Rs 4,189 crore.

Consolidated revenue jumped 50% from a year earlier to Rs 33,697 crore, matching street expectations.

Revenue for the nine months ended Dec. 31 surged 56% to Rs 91,850 crore.

Vedanta said higher revenue was primarily due to improved commodity prices and higher sales volume across businesses, but it was partially offset by lower sales volume at Zinc International and the iron and steel business. 

Other key highlights:

1) EBITDA for Q3 comes in at Rs 10,938 crore, up 42% from a year earlier.

2) EBITDA margin shrinks to 37% in Q3 from 39% a year earlier.

3) EBITDA for nine months ended Dec. 31 at Rs 31,551 crore, up from Rs 18,234 crore.

4) Net debt stands at Rs 27,576 crore as of Dec. 31, lower by Rs 7,781 crore from a year earlier.

5) Vedanta declares second interim dividend pay-out of Rs 5,019 crore, or Rs 13.5 per share in Q3.

6) Finance cost falls 8% to Rs 1,216 crore, mainly due to lower average borrowings.

Management commentary

Vedanta CEO Sunil Duggal said the group “delivered another strong quarter, with record quarterly and nine-month revenue and EBITDA”.

He said the rise in revenue and profit came as Vedanta managed to sustain margins, “benefitting from operational efficiencies and high commodity prices despite input commodity headwinds”.

“Overall, we have had a very good nine-month run with highest-ever production across almost all of our businesses,” he said. The third quarter played a big part in it with highest ever quarterly production from Hindustan Zinc Ltd as well as aluminium and steel, he added.