Mumbai /Kolkata: VedantaNSE -3.85 % Ltd’s profits in FY19 on a consolidated basis fell 15 per cent as a shutdown of its copper smelter at Tuticorin and lower metal prices drove attributable PAT down to Rs 6,857 crore from Rs 8,025 crore in FY18. Vedanta’s FY19 revenue was also lower by 1 per cent year on year at Rs 90,091 crore due to the shutdown, lower zinc and iron ore volumes and lower metal prices.
In Q4 FY19, Vedanta posted an 8 per cent rise in attributable net profit to Rs 2,615 ..
Vedanta’s earnings and profit margins are likely to remain subdued in the coming quarters as well. On Monday, the Chinese yuan dropped the sharpest since 2016 after US President Donald Trump threatened higher tariffs on Chinese goods. The Sino-US trade battle is not a positive for the global commodities industry, industry watchers have cautioned.
Lower raw material cost could partially help, however tepid realisations led by weak metal prices will continue to weigh heavy on the company’s profitability. Besides, the advantage of a weaker rupee in the last six months may not sustain. LME Zinc, LME Copper and crude prices too are sharply off their highs.
“Going forward, there will be volatility in prices of commodities in the midst of global trade wars. Prices will rally and keep moving up and down. We are thus focussing on cutting costs and raising volumes to widen our margins,” said Vedanta CEO Srinivasan Venkatakrishnan on Tuesday. For instance, in its aluminium business, Vedanta managed to cut down costs of production to $1,800/ tonne from $2,300/tonne.
At the current price of Rs 163.4, Vedanta’s stock is trading at 3.5 times anticipated FY20 EV by EBIDTA. This is much lower than its global peers, BHP Billiton and Anglo American, which trade at 5.9 and 4.4, respectively, according to Bloomberg. According to Bloomberg, analysts are expecting the company to deliver a 50% jump in its net profits in FY20. After the March quarter performance, analysts may revise their estimates downward.
Vedanta’s gross debt went up to Rs 66,225 crore as on ..
In Q4 FY19, Vedanta posted an 8 per cent rise in attributable net profit to Rs 2,615 ..
Vedanta’s earnings and profit margins are likely to remain subdued in the coming quarters as well. On Monday, the Chinese yuan dropped the sharpest since 2016 after US President Donald Trump threatened higher tariffs on Chinese goods. The Sino-US trade battle is not a positive for the global commodities industry, industry watchers have cautioned.
Lower raw material cost could partially help, however tepid realisations led by weak metal prices will continue to weigh heavy on the company’s profitability. Besides, the advantage of a weaker rupee in the last six months may not sustain. LME Zinc, LME Copper and crude prices too are sharply off their highs.
“Going forward, there will be volatility in prices of commodities in the midst of global trade wars. Prices will rally and keep moving up and down. We are thus focussing on cutting costs and raising volumes to widen our margins,” said Vedanta CEO Srinivasan Venkatakrishnan on Tuesday. For instance, in its aluminium business, Vedanta managed to cut down costs of production to $1,800/ tonne from $2,300/tonne.
At the current price of Rs 163.4, Vedanta’s stock is trading at 3.5 times anticipated FY20 EV by EBIDTA. This is much lower than its global peers, BHP Billiton and Anglo American, which trade at 5.9 and 4.4, respectively, according to Bloomberg. According to Bloomberg, analysts are expecting the company to deliver a 50% jump in its net profits in FY20. After the March quarter performance, analysts may revise their estimates downward.
Vedanta’s gross debt went up to Rs 66,225 crore as on ..
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