Vedanta Ltd., the Indian commodities conglomerate of billionaire Anil Agarwal, posted a 23.5% drop in quarterly earnings as one of the world’s tightest locks hit production and demand.
The group’s net income plummeted to 10,330 crore ($ 141 million) in the three months to June from 13,510 crore a year earlier, the company said in a statement Saturday night. Sales fell 25.9% to Rs 156.87 billion.
Key ideas
- Vedanta’s main businesses include zinc, aluminum, and oil and gas, all of which have been affected by a drop in demand due to the coronavirus pandemic.
- London-based Vedanta Resources Ltd. of Agarwal is in the process of privatizing Mumbai-listed Vedanta by buying minority shareholders to simplify its investments.
- Vedanta Resources is in talks with the banks for another $ 600 million to fund the delisting after having secured $ 3.15 billion in loans and bonds, according to people familiar with the information.
- Vedanta had a net debt of Rs 247.87 billion at the end of June.
- Vedanta’s Hindustan Zinc, also Asia’s most valuable zinc producer, reported a 23% drop in earnings for the June quarter due to lower prices and production.
- India’s economy posted its worst decline in the three months ending in June, as disruptions caused by the Covid-19 outbreak brought Asia’s third-largest economy to a standstill. Economists expect growth to contract in the year to March 2021, the first such contraction in more than four decades.
Market reaction
- Vedanta shares rose 0.4% on Thursday to close at 137.45 rupees in Mumbai. The stock is down 9.8% this year compared to a 6.2% drop in the benchmark BSE index.
- Analysts have 11 buy recommendations on the company, 4 reservations and 0 sales, according to data compiled by Bloomberg.
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