Vedanta Resources : Limited - Q1 Results FY18

Regd. Office: Vedanta Limited 1st Floor, 'C' Wing, Unit 103, Corporate Avenue, Atul Projects,

Chakala, Andheri (East),

Mumbai 400093, Maharashtra. www.vedantalimited.com CIN: L13209MH1965PLC291394

25 July 2017

Vedanta Limited

Registered Office: Vedanta Limited 1st Floor, 'C' Wing, Unit 103, Corporate Avenue, Atul Projects, Chakala, Page 1 of 8

Andheri (East), Mumbai 400093, Maharashtra, India. CIN: L13209MH1965PLC291394

1. Excludes custom smelting at Copper India and Zinc India operations

2. Excluding change in Zinc India temporary borrowings from Rs 7,908 crore in Q4 FY 2017 to Rs 6,959 crore and Preference shares of Rs 3,010 crore issued pursuant to Cairn merger

   Mr. Tom Albanese, Chief Executive Officer, Vedanta Ltd, said: "We have started the year on a positive note, with our Net Profit for Q1 doubling over last year. Our Zinc and Oil & Gas businesses have delivered a strong quarter. Vedanta is a world leader in Zinc, and Zinc prices have strengthened since the quarter end on continued global supply deficits. Our continued ramp-up in the Aluminium business has helped us exit the quarter on a strong production run rate of 1.4 mtpa. We are realizing the true benefits of Vedanta's diversified portfolio."

   Consolidated Financial Performance

   The consolidated financial performance of the company during the period is as under:

   (In Rs. crore, except as stated)

   FY 2017	Q1	Q1	% Change	Q4	% Change
   Actual	FY 2018	FY 2017		FY 2017
   71,721	Net Sales/Income from operations	18,203	14,365	27%	22,371	-19%
   21,437	EBITDA	4,965	3,539	40%	7,275	-32%
   39%	EBITDA Margin1	36%	32%	44%
   5,855	Finance cost	1,592	1,393	14%	1,503	6%
   4,581	Other Income	1055	1,271	-17%	921	15%
   20,058	Profit before Depreciation and Taxes	4,337	3,320	31%	6,768	-36%
   6,292	Depreciation & Amortization	1,386	1,550	-11%	1,604	-14%
   13,766	Profit before Exceptional items	2,951	1,770	67%	5,164	-43%
   114	Exceptional Items2	-	-	-	114
   2,103	Tax	681	403	69%	636	7%
   196	Dividend Distribution Tax (DDT)	-	9	-	154
   34	Tax on Exceptional items	-	-	-	34
   11,319	Profit After Taxes	2,270	1,358	67%	4,226	-46%
   11,467	Profit After Taxes before Exceptional items	2,270	1,358	67%	4,374	-48%
   11,663	Profit After Taxes before Exceptional items & DDT3	2,270	1,367	66%	4,528	-50%
   4,358	Minority Interest	745	604	23%	1,578	-53%
   6,958	Attributable PAT after exceptional items	1,525	754	2x	2,647	-42%
   7,127	Attributable PAT before exceptional items	1,525	754	2x	2,816	-46%
   7,323	Attributable PAT before exceptional items & DDT3	1,525	763	2x	2,970	-49%
   23.47	Basic Earnings per Share (Rs./share)	4.37	2.54	72%	8.94	-51%
   24.04	Basic EPS before Exceptional Items	4.37	2.54	72%	9.51	-54%
   24.70	Basic EPS before Exceptional Items & DDT3	4.37	2.57	70%	10.02	-56%
   67.09	Exchange rate (Rs./$) - Average	64.46	66.93	-3.7%	67.01	-3.8%
   64.84	Exchange rate (Rs./$) - Closing	64.74	67.62	-4.3%	64.84	-0.2%

3. Excludes custom smelting at Copper India and Zinc India operations

4. Exceptional Items Gross of Tax

5. In view of clarification issued by Ind AS Transition Facilitation Group, the Group has revised the accounting for dividend distribution tax (DDT) on profits of subsidiaries. DDT on profits of subsidiaries which is to be utilized against the equity dividend declared by the Company, is recognised in statement of changes in equity as against the previous policy of recognizing the same in the statement of profit and loss. The financial results for the previous periods/year have been restated to give effect of the same

6. Revenues

   Revenue in Q1 on y-o-y basis was higher by 27% due to higher volume at Zinc India & ramp-up at Aluminium business and higher commodity prices partially offset by currency appreciation, lower volume at Copper India and Iron ore and pot outages at 500Kt Jharsuguda-I smelter and TSPL fire incident in April 17.

   Revenues were 19% lower sequentially due to lower commodity prices, currency appreciation, lower volume at Zinc India and Copper India and lower availability at TSPL due to fire incident.

   EBITDA and EBITDA Margins

   EBITDA for Q1 at Rs 4,965 crore was up 40% on y-o-y basis on account of higher volumes at Zinc India; ramp up of volumes at the Aluminium business, and higher commodity prices. This was partially offset by currency appreciation, input commodity inflation and lower plant availability at TSPL.

   In a q-o-q basis, EBITDA was lower due to lower commodity prices, currency appreciation, lower volume at Zinc India as per mine plan and Copper India, lower plant availability at TSPL and higher COP at Aluminium business due to input commodity inflation, currency appreciation & pot outages.

   EBITDA margin1 was at 36%, higher on a y-o-y basis (Q1 FY2017 at 32%) given increased volumes and cost efficiencies. However, it was lower q-o-q on account of higher production at Zinc India as per mine plans in Q4 FY 2017, lower commodity prices and currency appreciation.

   Depreciation & Amortization

   Depreciation at Rs. 1,386 crore, was lower on y-o-y basis by Rs. 164 crore driven by lower depreciation at Oil & Gas business due to change in method of calculation of Unit of production (UOP) charge to "Proved and Developed Oil and Gas Reserves" (1P) in accordance with the Guidance Note on Accounting for Oil and Gas Producing Activities which was effective April 1, 2017 instead of earlier approach of "Proved and Probable Reserves" (2P). This was partially offset by capitalization of aluminium pots & power units.

   Depreciation was lower by Rs. 218 crore q-o-q mainly on account of lower charge at Zinc India due to lower amortization of mining expenses owing to lower ore production and lower charge at oil & gas business due to change in method as explained above. This was partially offset by further capitalization at aluminium business.

   Finance Cost and Other Income

   Finance cost during the quarter was Rs. 1,592 crore, higher by Rs. 199 crore on y-o-y basis on account of higher temporary borrowing at Zinc India, capitalisation of Aluminium & power capacities and interest on preference shares, partially offset by lower interest rates.

   Compared to previous quarter, it was 6% higher on account of temporary borrowing at Zinc India and interest on preference shares, partially offset by repayment of some term debt and lower interest rates.