Vedanta Q1FY21 profit falls 23% to Rs 1,033 crore as lockdown hits demand

Compared for the same period, EBITDA during the quarter fell 23 percent to Rs 4,008 crore with a margin of 28 percent. The company’s net debt at the end of June quarter stood at Rs 24,787 crore, down 14 percent.

The aluminium cost of production was at $1,268/t, down 13 percent quarterly and 28 percent annually.

“Vedanta reported higher than expected Q1FY21 numbers. Aluminium EBITDA constituted around 72% of the EBITDA beat. The segment’s EBITDA/te surprised at $360/te, of which $101/te was on account of RPO liability reversal,” ICICI Securities said.

Power contributed around 12 percent of the EBITDA beat, which can be attributed to 97 percent Talwandi Sabo (TSPL) PAF, while sales from TSPL was only 643 million units, down 76 percent YoY. TSPL receivables reduced in FY20.

There has been significant cost reduction in Zinc International (22 percent YoY and 24 percent QoQ) and currency depreciation of the host countries played a big part.

Vedanta committed to provide loans and guarantees of $1 billion to the promoter entity, Vedanta Resources Ltd, of which $307 million had been extended as of June 2020.

“While this is negative for the stock, we believe the outcome of the delisting offer (likely by 16 Oct) will also be a key driver for of the stock price,” brokerage CLSA said in a note.

CLSA maintained an 'outperform' rating with a target price of Rs 133 per share.

At 12:35 pm, the shares were trading 0.65 percent lower at Rs 136.55 on the BSE.