Vedanta, a major player in the mining sector, experienced selling pressure as its shares fell by almost 3% to Rs 271 on the BSE following disappointing June quarter results. The company reported a net profit of Rs 2,640 crore, marking a significant 40% decline from the same quarter in the previous financial year. This drop was attributed to the weakness in commodity prices during the period, particularly affecting the zinc and aluminum sectors.
Vedanta Shares Drop 3% Following Disappointing June Quarter Results
In addition to the decrease in net profit, Vedanta’s revenue also saw a decline of 13% year-on-year, reaching Rs 33,342 crore in the June quarter. The company’s EBITDA (operating profit) for the April-June period stood at Rs 6,975 crore, representing a 35% decrease compared to the same period last year, primarily due to lower commodity prices and reduced sales.
Weak Commodity Prices Impact Vedanta’s Q1 Performance
Kotak Institutional Equities maintained a ‘Sell’ rating on Vedanta, with a target price of Rs 215, anticipating continued weakness in commodity prices and its impact on the company’s earnings. Citi also downgraded Vedanta shares to ‘Sell,’ reducing the target price to Rs 225, citing concerns about the company’s cash position amid its plan to launch semiconductors and displays business.
Nuwama Institutional Equities lowered its rating on the stock to ‘Reduce’ from ‘Buy,’ alongside reducing the target price from Rs 367 to Rs 249, highlighting Vedanta’s mounting debt and its unfavorable investment prospects.
