Indian miner Vedanta tops Q2 profit view on higher metals prices
Nov 8 (Reuters) -Indian miner Vedanta Ltd VDAN.NS posted a bigger-than-expected second-quarter profit on Friday buoyed by higher metals prices even as demand was sluggish.
The conglomerate, led by billionaire Anil Agarwal, reported consolidated net profit of 43.52 billion rupees (about $516 million) for the September quarter, which surpassed analysts' average estimate of 23.67 billion rupees, as per data compiled by LSEG.
Vedanta had posted a loss of 17.83 billion rupees in the year-ago period, as it paid a total of 84.56 billion rupees in tax, including a one-time charge for minimum alternate tax.
In the reporting quarter, Vedanta benefitted from higher prices of aluminium, zinc and copper, its biggest businesses.
Domestic aluminium prices surged 10.7% in the July-September quarter, while copper prices and zinc prices rose 11.7% and 14.4%, as per Systematix Institutional Research.
The benchmark aluminium CMAL3, copper CMCU3 and zinc CMZN3 prices on the London Metal Exchange strengthened on a weaker U.S. dollar and expectations of economic recovery in major consumer China following a barrage of stimulus measures.
Higher commodity prices tend to raise selling prices and margins for mining companies.
Vedanta Aluminium, which is the country's largest producer of the metal, reported a 15% rise in pre-tax profit to 137.34 billion rupees. The company's copper and zinc businesses reported 38% and 21% pre-tax profit growth, respectively.
Revenue from operations dipped 3.6% to 371.71 billion rupees amid subdued domestic demand as above-average rainfall slowed activity in the construction and automobile sectors.
Expenses increased 1.6% to 331.69 billion rupees.
Vedanta's unit, Hindustan Zinc HZNC.NS reported a profit beat on higher zinc prices, last month.
Separately, Vedanta said it will invest 118.16 billion rupees ($1.40 billion) to ramp up smelter and wire rod capacity and will fund the investments via internal accruals and debt.
It also approved capex worth 52.09 billion rupees for the acquisition and expansion of Athena Chhattisgarh Power Plant Project.
($1 = 84.3510 Indian rupees)
Reporting by Manvi Pant in Bengaluru; Editing by Eileen Soreng
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