Indian metals-to-oil conglomerate Vedanta missed quarterly profit estimates on Thursday, as lower aluminum and copper prices and higher tax expenses overshadowed the impact of strong local demand.
Vedanta’s aluminum business is the biggest in India and contributes to nearly 40% of the company’s revenue. Zinc is the second-biggest business, followed by copper.
The benchmark three-month aluminum and copper dropped 4% and 4.1% on-year, during the reporting quarter, pressured by geopolitical tensions and uncertainty around US trade policies.
Lower commodity prices tend to hit selling prices and margins for mining companies.
Vedanta’s overall revenue increased by 6.2% year-on-year to 374.34 billion rupees ($4.3 billion) in the quarter ended June 30, driven by higher revenue from aluminum and copper, which grew 7.7% and 34.6%, respectively.
The company’s consolidated net profit declined to 31.85 billion rupees from 36.06 billion rupees a year ago.
Analysts, on an average, expected a profit of 34.83 billion rupees, per data compiled by LSEG.
Its earnings before interest, taxes, depreciation and amortization rose about 2% to 60.53 billion rupees while tax expenses jumped to 15.96 billion rupees from 8.31 billion rupees a year ago.
Vedanta’s operating profit margin remained flat at 21%.
Earlier this month, Vedanta’s subsidiary Hindustan Zinc posted a bigger-than-expected first-quarter profit, as strong demand for the metal helped cushion the impact of prices.
($1 = 87.6050 Indian rupees)
(By Manvi Pant and Anuran Sadhu; Editing by Mrigank Dhaniwala)
