Stock price of Sesa Sterlite, a Vedanta Group company, tumbled on the Bombay Stock Exchange today mainly because of a weak performance in the September quarter. The company has reported a net profit of Rs 1,658 crore in the quarter gone by, down 32% from the corresponding period last year.
Today, the stock ended 3% down at Rs 253 per share on BSE.
The company's total income stood at Rs 19,549 crore for the quarter against Rs 25,356 crore in the year-ago period.
Despite higher margins from zinc, copper and iron ore businesses, margins stood at 32.4% in the September quarter from 38 percent last year, as they were affected negatively by a drop in profitability at Cairn India, said Centrum Brokering in its report.
Slow commissioning of projects with low return potential has been affecting the company's performance, said analysts. However, the upcoming coal block auction holds the key, they said.
"We see opportunity for Sesa Sterlite to ensure coal security by procuring suitable coal blocks in the upcoming auctions but wait for the auction completion to factor in the impact," said Centrum.
More From This Section
The company's Vedanta Aluminium's 1.25 million tonne smelter remains largely non-operational for want of captive bauxite and power. Also, BALCO's 325,000-tonne-per-annum smelter is partially commissioned (84 pots on-stream) and further ramp up is dependent on the start of 1200 MW power plant which is still awaiting approvals.