- The aluminum performance was, however, a standout for the quarter, as, despite a 9% Y/Y drop in aluminum prices, EBITDA still surged on lower alumina and coal prices, as segmental margins rose c. 1,200bps.
- However, O&G was the main drag, as lower prices and production led to EBITDA more than halving for the quarter, with the segment’s share in consolidated EBITDA falling to c. 19% (from c. 29% in the prior year).
- Zinc International (ZI) also detracted (but to a lesser extent), as the segment saw an EBITDA decline for the second consecutive year (-19% Y/Y) on lower commodity prices and production.
- Assuming the parentco does not default, Vedanta would need to upstream DPS of c. Rs 17.5/year (implying a c. 16% dividend yield at current prices) for the parent to meet its interest obligations of c. $440 million in fiscal 2021 and 2022.
- Note that counteroffers will need to be more than book value, which currently stands at c. Rs 146/share (vs. the current Rs 110/share trading price).
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