Vedanta to weather note ban impact

With demonetisation having no impact on the non-ferrous metals segment, London-based Vedanta’s standalone business divisions are expected to have had higher volumes in the December quarter from the corresponding period last year, said analysts.

Vedanta’s standalone businesses are copper, iron ore, aluminium and power, together forming almost half of the consolidated revenue.

“There is a significant export element in copper, aluminium and iron ore this time (December quarter) and, hence, we might see good volumes. Alongside, iron ore prices have moved up and so have aluminium. This should help realisations,” said Ritesh Shah, senior analyst with Investec Securities.

In recent quarters, relatively weaker metal prices and dwindling volumes from the iron ore segment have been impacting total net sales (standalone). Since early 2016, global iron ore prices have more than doubled, helping mining companies to get better realisations. With ore prices at $60-80 in the December quarter, realisations are seen improving significantly for this business, said brokerages. In aluminium, with the average global price rising to $1,700 a tonne in the December quarter from $1,600 in the September one, realisations in this segment are also seen as moving up.

The company produced 156,040 tonnes in OctoberNovember (December figures are still to be reported), up from 142,429 tonnes in the corresponding period last year. “The non-ferrous segment is organised. So, demonetisation will have no impact on volumes for the quarter,” says Shah.