It showed record production from our Tier I zinc mines, resulting in strong free cash flow during the quarter. The company is continuing to drive efficiency improvements and is optimizing opex (operational expenditure) and capex (capital expenditure) across the business, taking measured steps to reduce net debt and maximize free cash flow.
One significant thing, which needs to be mentioned here is that: during the September, 2015 quarter, the company managed to reduce net debt and finance costs. As of September, net debt was at Rs.27,105 crore compared with Rs.32,440 crore at the end of September 2014.
For the September quarter, the company managed to post profits in its zinc business (which also includes production of lead and silver), copper business and power generation business. However, its two main businesses OIL and gas under subsidiary Cairn India Ltd and aluminium, run under Vedanta Aluminium and Balco Ltd—posted losses during the quarter.
“Finance cost at Rs.1,418 crore was lower by Rs.46 crore year-on-year, primarily due to debt refinanced at lower cost… The company was also able to renegotiate spreads on its existing term loan portfolio by an average of ~22 basis points. This, along with the declining interest rate scenario in India, led to a 30 bps reduction in the borrowing cost,” said a note issued by the company, post September, 2015 quarter results.
Though the near-term MARKET outlook remains challenging, but it's right mix of low-cost assets fuelled with new technologies, is likely to benefit the company, from future demand in India and globally.