Nine metal stocks fell by 0.29% to 6.97% at 14:43 IST on BSE after Sterlite Industries (India) reported weak Q1 results after trading hours on Thursday, 25 July 2013.
JSW Steel (down 4.1%), Sesa Goa (down 6.97%), Sterlite Industries (India) (down 6.66%), Sail (down 0.23%), Hindalco Industries (down 6.46%), NMDC (down 0.29%), Jindal Steel & Power (down 2.72%) and Hindustan Copper (down 1.58%) edged lower.
Tata Steel fell 1.7% to Rs 219.25 after hitting a 52-week low of Rs 216.85 in intraday trade today, 26 July 2013.
The BSE Metal index was down 3.75% at 6,962.24. It underperformed the BSE Sensex, which was down 0.28% at 19,748.94.
The BSE Metal index had underperformed the market over the past one month till 25 July 2013, falling 3.18% compared with the Sensex's 6.31% gain. The index had also underperformed the market in past one quarter, sliding 17.41% as against Sensex's rise of 2.05%
Sterlite Industries (India) reversed initial gains in volatile trade. The company reported weak Q1 results after trading hours on Thursday, 25 July 2013. The company's consolidated net profit fell 22% to Rs 934 crore on 23% fall net sales/income from operations to Rs 8190 crore in Q1 June 2013 over Q1 June 2012.
Earnings before interest, taxation, depreciation and amortisation (EBITDA) declined 7% to Rs 2173 crore in Q1 June 2013 over Q1 June 2012. Sterlite said revenue and EBITDA were lower primarily on account of a temporary closure of the Tuticorin copper smelter, which was partially offset by higher power generation at the Jharsuguda 2,400 megawatts (MW) power plant and higher production at Zinc India. Temporary closure of the Tuticorin smelter negatively impacted EBITDA by Rs 180 crore. The profit after tax (PAT) and basic EPS were impacted by lower EBITDA and higher losses at associate. Higher interest cost on borrowings was largely offset by increase in other income.
Following the Tamil Nadu Pollution Control Board's (TNPCB) order for closure of the Tuticorin copper smelter on 29 March 2013, the National Green Tribunal (NGT) after hearing company's appeal, passed an interim order on 31 May 2013, conditionally allowing the smelter to recommence operations, and the plant restarted on 23 June 2013. On July 15, 2013, an expert committee confirmed that the plant meets the prescribed standards, and the NGT in its order of even date took cognizance of the findings of the expert committee and observed that the company "is neither an existing pollutant nor is a threat of future pollution (not violating prescribed standards) resulting in health hazards", and declined to modify its earlier interim order dated 31 May 2013, enabling the plant to continue to operate. Separately, the TNPCB has also filed an appeal against the NGT's earlier interim order before the Supreme Court.
Meanwhile, Sterlite Industries (India) said after market hours on Thursday, 25 July 2013 that the proposed merger of the company with Sesa Goa and Vedanta Group consolidation and simplification has received the approval of the High Court of Madras on 25 July 2013 and the High Court of Bombay at Goa on 3 April 2013. One of the shareholders of Sesa Goa has filed an appeal against the order passed dated 3 April 2013 by the High Court of Bombay at Goa before the Division Bench. The hearing before the Division Bench has been completed and the order of the Division Bench is awaited.
Commenting on the company's first quarter results, Mr. Anil Agarwal, Chairman, Sterlite Industries said: "We achieved a strong performance in the first quarter of FY 2014, and delivered production growth at our world-class zinc, silver, power and aluminium businesses despite global economic volatility and lower metal prices. We remain focused on completing the merger with Sesa Goa, and ramping up production from our growth projects across our world class asset portfolio."
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