Vedanta Iron and Steel Narrows September Quarter Loss to 324 Crore

what happened

Vedanta Iron and Steel's consolidated loss in the September quarter narrowed to 324 crore from 477 crore a year earlier, which the company attributes mainly to lower expenses. Total costs dropped more than 9% to 3,129 crore.

The company had posted a profit of 121 crore on revenue of 3,662 crore in the June quarter, but seasonal disruptions in iron ore output and planned plant shutdowns pushed it back into a loss. Revenue fell 2% year on year to 2,788 crore, while steel output rose 4% to 532,000 tonnes.

EBITDA climbed 56% to 83 crore, and the EBITDA margin improved by 112 basis points to 3%. For the first half, revenue grew 8% to 6,450 crore and EBITDA rose 54% to 598 crore, while the loss totaled 203 crore against 622 crore a year earlier. Net debt stood at 2,763 crore at the end of September, compared with 2,733 crore at the end of June. The shares closed at 28 on the BSE, 5% above the previous close.

why it matters

For markets, the key point is operating profitability: the company blames the weak quarter on raw material disruptions and higher input and conversion costs. Higher EBITDA and a smaller loss support the stock, but the rising net debt remains a risk factor for investors.

market impact

Vedanta Iron and Steel shares: a smaller loss and higher EBITDA support the stock

• ▲Vedanta Iron and Steel shares pressure up — a smaller loss and higher EBITDA improve the business picture

tags

instruments