vedanta share price: Vedanta shares fall 4% as Q2 net profit declines 61%

Shares of mining company fell as much as 4% to Rs 274 in Monday’s intraday trade after the company reported a 60.8% decline in consolidated net profit at Rs 1,808 crore for the quarter that ended September 30, 2022 on the back of higher expenses. The company had posted a consolidated net profit of Rs 4,615 crore in the year-ago period.

The company’s expenses during the July-September period increased to Rs 33,221 crore from Rs 23, 171 crore in the year-ago period. Its consolidated income during the quarter under review increased to Rs 37,351 crore from Rs 31,074 crore last year.

EBITDA of the company declined 24% YoY to Rs 8,038 crore as against Rs 10,582 crore in Q2FY22. EBITDA margins contracted 1,500 basis points to 25% from 40%.

The company said its depreciation and amortisation increased by 24% YoY and 6% QoQ to Rs 2,624 crore, mainly due to higher depletion charges in oil & gas and amortisation at Zinc India.

Vedanta’s Chief Executive Officer Sunil Duggal said that the company has generated strong free cash flow (pre-Capex) of Rs 8,369 crore strengthened by robust operational and financial performance.

Vedanta said that its growth and vertical integration projects, intended to reduce market volatility impact and create shareholders’ value, have been progressing well.

The company said that its board has given the go-ahead for the expansion of rolled product capacity at its arm Balco from the current 50 KTPA to 180 KTPA at a revised cost of Rs 595 crore. “With the completion of this project, Balco will be placed in the high premium product segment,” Vedanta said.

The board, it further said, has approved the expansion of the smelter capacity of Balco from the existing 580 KTPA to 994 KTPA at a revised cost of approximately Rs 8,094 crore, subject to necessary government approvals.

At 10.25 am, the scrip was trading 0.9% lower at Rs 282 over its last day’s closing price of Rs 285 apiece. The stock has fallen nearly 31% in the last six months, while it has plunged about 20% year to date.

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