Higher coal prices to impact Vedanta’s profitability in 3rd quarter: Report
Higher cost of coal due to the ongoing shortage of the dry fuel in India will impact the profitability of Vedanta in the third quarter which is likely to be temporary, according to a report.
Various power plants in the country are grappling with fuel coal shortages.
“While higher coal costs in India due to ongoing ‘coal shortage’ would impact Vedanta’s (VEDL) profitability in 3Q, we expect it to be temporary,” according to a report by Credit Suisse.
Ramp-up of captive coal mines would help reduce cost volatility in the medium term, it said.
“We note that coal costs in 2Q were USD 300 per tonnes lower than peak (US$800 per tonnes), we may see peak costs in Oct. We believe Vedanta has scope to increase earnings further in FY23,” it added.
