Vedanta Q3 resutls: PAT rises 59%, plans to reduce debt by Rs 5,000 crore in Q4

Vedanta Q3 resutls: PAT rises 59%, plans to reduce debt by Rs 5,000 crore in Q4

Mumbai: reported a 59% rise in consolidated net profit at Rs 4,224 crore for the December quarter of FY 21 as against a net profit of Rs 2,665 crore during the same period last year mainly on account of increased commodity prices and better sales volumes in Zinc and Iron Ore businesses.

The company reported a net profit of Rs 1,657 in Q2 of FY 21.

“We continue to ramp up across the Zinc and Iron & Steel verticals along with successful project delivery in the Oil & Gas vertical. Aluminium business has had yet another exemplary quarter as it continued the momentum of cost nationalization,” said unil Duggal, chief executive officer, Vedanta.

The company’s cash and cash equivalents stands at Rs 27,055 crore. Net debt was at Rs 35,357 crore on 31st December 2020, higher by Rs 14,084 crores as compared to 31st March 2020, on account of dividend payment and inter-company loan to VRL, offset by positive cash flow.

“Net debt to ebitda continues to be strong at 1 -1.5 range, we do expect it to come back to around 1 by March of FY 21. In Q4 we believe we will be able to reduce by debt by around Rs 5000 crore based on our strong earnings and other cost profile” said GR Arun Kumar, chief financial officer, Vedanta

“Capex for the year was $600 million, for 9 months we have spent $350 million. We plan to come much lower on the capex guided maybe around $500 million. Maybe in FY 22, we do have a lot of exciting brownfield growth, and will guide for FY22 later,” added Kumar.

During the quarter under review, Vedanta’s consolidated earnings before interest, taxes, depreciation and amortization rose 18% to Rs 7,695 crore.

Revenue in Q3 FY2021 was at Rs 22,498 crore, higher by 8% q-o-q and by 6% y-oy-, primarily due to higher commodity prices, higher sales at Aluminium, Iron ore and Steel business, partially offset by lower sales at Zinc India, lower PLF at TSPL and rupee appreciation, the company said in a statement.

“We have capitalized many opportunities throughout the pandemic…we are currently doing some debottlenecking exercises inside the company like digitization, asset optimization and more,” said Duggal.

As per estimates Nexxt year India will grow by 12% and we know that to feed 12% one requires much higher commodity supplies. Vedanta will be able to tap that opportunity, and we are in a sweet spot, Duggal added.

On a segmental basis, Revenue from Vedanta’s Iron ore segment rose 54% to Rs 1,284 crore. Other businesses like Copper revenue was at Rs 2,664 crore, up by 45%. Vedanta’s Zinc and Lead business 21% to Rs 4,745 crore and Silver business grew by 65% to Rs 1,145 crore.

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