InvestorQ : Why did Vedanta report such a sharp fall in profits in the September quarter?
Arusha Ray made post

Why did Vedanta report such a sharp fall in profits in the September quarter?

Answer
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1 month ago
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Vedanta, part of the global Anil Agarwal group, reported 20.6% higher sales for September 2022 quarter at Rs36,654 crore. In terms of specific verticals, the company saw positive growth across most of its mining and metal verticals in the quarter. Revenues from zinc, lead, silver surged by 37% yoy to Rs8,098 crore. Vedanta reported spike in revenues from oil & gas, aluminium, copper, iron ore and power segments in the quarter. Gross debt of the group increased to Rs58,597 crore in the quarter but its dividend yield stands at an impressive 15.4%. Volume growth was seen across aluminium, zinc and silver in Q2FY23.

Vedanta Ltd

Rs in Crore

Sep-22

Sep-21

YOY

Jun-22

QOQ

Total Income (Rs cr)

₹ 36,654

₹ 30,401

20.57%

₹ 38,622

-5.10%

Net Profit (Rs cr)

₹ 1,808

₹ 4,615

-60.82%

₹ 4,421

-59.10%

Diluted EPS (Rs)

₹ 4.85

₹ 12.38

₹ 11.84

Net Margins

4.93%

15.18%

11.45%

Let me now turn to the profits of the company. PAT for September 2022 quarter was sharply down -61% at Rs1,808 crore and even on sequential basis the profits were down -59%. If you look at the EBITDA for the quarter, the biggest impact was felt in the aluminium business with the sharp surge in power and fuel costs resulting in the EBITDA falling from Rs4,647 crore to Rs761 crore yoy. In the latest quarter, the power costs nearly doubled from Rs4,412 crore to Rs8,553 crore and that pressured profits to fall. Net profit margins at 4.93% in Q2FY23 is sharply lower compared to 15.18% in Q1FY22 and 11.45% in Q1FY23.

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