Vedanta

From a loss in Q4FY15, the company did much better in Q1FY16, posting a consolidated net profit of Rs.866 crore, up 131% (YoY). This QoQ turnaround was driven by better returns on copper and zinc, lower finance costs and forex gains.  There was also an exceptional items of Rs. 2,128 crore (gross of tax) for Q1 FY2015 pertain to change in method of depreciation at Cairn India for the period up to 31st March 2014. The net profit could have been better but for the higher tax outgo and much lower other income. 

Revenue in the quarter were largely flat at Rs 16,952 crore. Decline in crude oil prices by 44% (YoY) impacted revenues by Rs. 1,856 crore and was largelyoffset by higher revenues from Copper India which had a maintenance shutdown during Q1 FY2015, higher volumes in Zinc India and start up of Unit I of TSPL. EBITDA for the quarter was at Rs. 4,039 crore was lower by 29% due to a steep fall in crude oil prices and aluminium premia. EBITDA was also impacted by one-time expense related to Renewable Purchase Obligations (RPO) provision of Rs 414 crore for the previous years (FY2013 to FY2015) for the Aluminium, Zinc Zndia and Copper –India businesses.

Finance cost at Rs.1,358 crore was lower by Rs. 179 crore primarily due to debt refinancing at a lower cost. However, sequentially, the increase in borrowings to fund projects and temporary working capital requirements resulted in a marginal increase in finance costs. Other income at Rs.893 crore decreased by Rs.317 crore due to timing differences where income earned on certain investments are recognised at maturity due to partial adoption of AS 30. During the quarter, rupee depreciation of 1.9% led to a forex gain of Rs.255 crore on dollar denominated investments, advances and trade debtors. Tax charge in the current quarter of Rs.352crore (tax rate 17%), compared with Rs. 362 crore in Q1 FY2015 (tax rate 11% excluding exceptional item), is higher following change in profitability mix.

Gross debt increased by Rs.1,778 crore to Rs.79,530 crore, on account of funding project payments and temporary working capital requirements. Debt levels are expected to reduce as working capital is repaid in Q2 FY2016. Cash and liquid investments stands at Rs.47,091 crore as on June 30, 2015.