Vedanta posts massive Q4 net loss

Vedanta, the world’s largest miner, which its owner Billionaire Anil Agarwal plans to delist from the domestic bourses, has posted a massive net loss of Rs 12,521 crore for the quarter ended March 31 on the exceptional loss of Rs 17,132 crore.

The company had posted a net profit of Rs 2,615 crore in the corresponding quarter last year.

Consolidated EBITDA totalled Rs 45bn wherein the EBITDA beat was driven by aluminum division which reported a multi-year high EBITDA of Rs 11.4bn.

Aluminum business was driven by continuous production despite lockdown, significant reduction in costs especially coal costs which is one of the key cost component in aluminum business. Oil and gas business continued to drag the group ebitda during the quarter due to 21% qoq decline in Brent.

Vedanta received an all round assault on its oil and gas, copper and iron ore business primarily due to impairment of assets.

Interestingly, the company’s operating parameters appears to be strong as despite of huge write down, they made a gross margin of Rs 4,500 crore that too on a lower turnover.

They company hopes to see a panic sell off. Ebitda declined 23% on year to Rs 4,844 crore during the quarter under review. Net sales also declined 16% on year to Rs 19,513 crore in Jan-Mar quarter against Rs 23,092 crore in the same period last year.

The topline declined 8% on quarter basis, primarily due to lower commodity prices, further impacted by Covid-19, and lower volume at aluminium business.

The company has cash and liquid investment of Rs 37,914 crore as of March 31.

Gross debt of the company declined by Rs 7,038 crore on year to Rs 59,187 crore. Likewise, net debt decreased by Rs 5,683 crore on year to Rs 21,273 crore on March 31, primarily due to the repayment of debt and unwinding of working capital being partially offset by dividend payment by Cairn India Holdings.

Vedanta has taken a pro-active approach to keep its assets and people safe while ensuring optimum operations during these difficult times.

Net net this poor performance comes at a time when the delisting proposal has been put up by the management. It remains to be seen as to how institutional holders will react to this offer as the current BV of Vedanta stands at Rs 208.55.

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