Subdued commodity prices have brought Vedanta’s net profit down by 41% to Rs 974 crore in the July-September quarter, compared with Rs 1,640 crore during the corresponding quarter last fiscal.

The fall in net profit was sharper compared to the dip in revenues which fell by an annual 16% to R16,349 crore during the second quarter this fiscal year.

The diversified natural resources conglomerate attributed the decline in revenue and profit to the fall in crude oil and metal prices, but said a better show was likely in the second half thanks to resumption of iron ore mining in Goa and appropriate cost controls wherever required.

The fall in prices pulled down the earnings before interest, tax, depreciation and amortisation (EBITDA) by as much as 35% to R4,113 crore. Finance cost was lower by R46 crore to R1,418 crore during the reporting quarter.

However, due to a 3.1% depreciation of rupee, the company had a R 494 crore forex gain during the

quarter on its dollar-denominated investments, advances and trade debtors.

Vedanta would be looking at low-cost production across its diversified portfolios that include oil & gas, aluminium, copper, zinc and iron ore among others in sync with the subdued commodity prices. And if the subdued price trend continues, it might also have to take “some tough decisions” as “protecting the business is its first and foremost priority,” said CEO Tom Albanese. He, however, did not elaborate. “While the near-term market outlook is challenging, we believe we have the right mix of low-cost assets fuelled with new technologies to benefit from future demand in India and globally,” he added.

Vedanta, which has recently started iron ore mining in Goa, expects to produce and sell its full quota of 5.5 million tonnes in the current fiscal. However, it seeks permission for allowing the government to allow dumping of wastes outside the lease.

The company has a gross debt of R79,433 crore as on September-end, while its net debt mounted by R5,335 crore during the quarter to R27,105 crore as a result of several initiatives to optimise capex, opex an working capital. The company contributed R12,104 crore to the Indian exchequer during the first half of the current fiscal in the form of taxes, duties, royalties and profit petroleum.

Company CFO D D Jalan said that Vedanta has been evaluating different structures and options for future maturities with an objective to lower funding cost or extend the maturity profile to retire its short-term loans. The company has R 52,328 crore cash and liquid investments as on September-end.

It has been mostly invested in debt-related mutual funds, bank deposits and bonds.

Relating to the merger of Vedanta and Cairn India, the company said both NSE and BSE have provided their “no-objection” certificate and within March next year, the scheme of amalgamation was required to be submitted to the High Court.

Albanese said the buy out of minority investors in Cairn India could be put before shareholders as early as January next year and the company was not currently considering plan to sweeten offer to Cairn India minority shareholders.