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Sesa Goa Q1 result: Company reduces volume growth projection

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Sesa Goa reduces volume growth projection
Sesa Goa, the mineral company in India which is part of the Vedanta Group, has reduced its year-on-year volume growth projection from 25% to 15% for FY12. This was due to export ban in Karnataka and other issues, P.K Mukherjee, managing director of the company was quoted by the moneycontrol.com.
 

Mukherjee said, “This is the first time we are reversing our growth estimates as various restrictions-particularly export ban in Karnataka coupled with restrictions of logistics on public roads of Goa. Considering that circumstances will improve by the end of FY12, we have downgraded our volume growth".

Few analysts were quoted by the media stating that the bull run in merchant mining has come to an end after five years. Also the company and the investors are realising that environmental and sustainablity issues have made it difficult to achieve quick growth. Finally the realization that the government will levy 20% duty on all kinds of ore export from March this year has further hit the sentiments. This has substantially hit profitability.

The company claimed in its press release that consequent to the merger of its subsidiary Sesa Industries, the figures of the Pig Iron segment were incorporated in the company's result on standalone basis, from the quarter ended March 31, 2011. The figures for the quarter ended June 30, 2011 are therefore not comparable with those or the corresponding quarter of the previous period on standalone.

Quarterly Results

During the quarterly result for the period of June 30, 2011; Sesa Goa's net profit for June 30, 2011 was Rs 672.98 crore. Meanwhile the company's revenue was at Rs 1698.35 crore. And interest expense stood at Rs -49.2 crore. Operating profit margin for the company was at 61.66% highest in over the last 5 quarters.

OneIndia Money

Story first published: Friday, July 22, 2011, 13:12 [IST]
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