Vedanta quarterly PAT at ₹ 5,095 crore, surges 54% YoY

Demerger scheme filed with NCLT; demerger is on track | Net debt to EBITDA improved to industry best 1.5x from 1.9x

Bengaluru, 6th August 2024: Vedanta Limited today announced its Unaudited Consolidated Results for the First Quarter ended 30th June 2024.

Financial Highlights

• Consolidated Revenue of ₹ 35,239 crore, up 1% QoQ and 6% YoY.
• Consolidated EBITDA of ₹ 10,275 crore, up 15% QoQ and up 47% YoY.
• Industry best EBITDA margin^* of 34%, ~1000 bps YoY. 
• Profit after tax at ₹ 5,095 crore, up 124% QoQ and 54% YoY.
• Strong double-digit return on capital employed c.25%, improved 181 bps QoQ and 763 bps YoY.
• Liquidity improved by 17% YoY with Strong Cash and Cash Equivalent of ₹ 16,692 crore.
• Generated robust Free cash flow (pre capex) of ₹ 4,371 crore up 41% YoY.
• Net debt of ₹ 61,324 crore as on 30^th June 2024.
• Net debt/ EBITDA at industry best 1.5x in 1QFY25 vs 1.9x in 1QFY24.
• Raised Rs. 8500 Cr through one of the largest QIP in industry.
• All the requisite approvals secured, and demerger scheme filed with NCLT; demerger is on track. 

Operational Highlights  

Below are the key operational highlights across the Group during the Quarter:

• Overall cost of production declined by ~20% YoY on back of structural changes and other initiatives.
• Aluminium

• Highest ever Alumina production at Lanjigarh refinery at 539 kt, up 11% QoQ and 36% YoY driven by new capacity. 
• Cast Metal production of Aluminium at 596 kt flat QoQ and up 3% YoY.
• Aluminium cost of production lower by 11% YoY and flat QoQ. 
• Zinc India

• Highest-ever mined metal production in first quarter at 263 kt, up 2% YoY.
• Highest-ever refined metal production in first quarter at 262 kt, up 1% YoY.
• Zinc International

• Mined metal production of Zinc International at 38 kt, up 13% QoQ because of higher zinc grades and recoveries, down 45% YoY due to lower tonnes milled and zinc grades.
• Overall cost of production down by 4% QoQ.
• Oil and Gas
• Average daily gross operated production of 112.4 kboepd, natural decline was partially offset by the infill wells brought online in Mangala and RDG fields.
• Iron ore

• Karnataka saleable ore production at 1.2 million tonnes, down 4% YoY and 33% QoQ due to temporary suspension of mine production during the month of May’24.
• Pig Iron production at 205 kt up 4% QoQ.
• Steel

Saleable steel production at 356 kt up 4% QoQ and 10% YoY on account of improved operational efficiency.

• Facor

Highest ever quarterly Ferro Chrome production at 28 kt up 4% QoQ and ~3x YoY.

• Copper India: 
• Tuticorin Smelting operations have remained halted since April 2018. The company is evaluating the legal remedies for sustainable restart of Tuticorin plant.

Commenting on Q1FY25 results, Mr Arun Misra, Executive Director Vedanta Limited said “Vedanta has delivered a strong start to the year, with exceptional EBITDA improvement of 47% and PAT improvement by 54% year over year on the back of improved margins, and robust cost reduction across all operations. Our aluminium and zinc divisions continue to outperform industry benchmarks, consistently ranking in the top quartiles and deciles of the global cost curve. These achievements are a direct result of our strategic focus on cost, as reflected in a 20% year-over-year reduction in overall Cost. Our growth projects are well on track, and we remain committed to commission the majority of these projects in FY25. Moving ahead, our focus on operational efficiency, sustained expansion, and ESG excellence will guide our journey. With this dedication, we are confident in our ability to create substantial shareholder value in the year ahead.”

Mr Ajay Goel, CFO, Vedanta, said “The start of FY25 has demonstrated phenomenal growth. In this quarter, we achieved an impressive EBITDA of Rs 10,275 crore, a jump of 47% YoY, with robust EBITDA margin of 34% and a PAT of Rs 5,095 crore, with YoY growth of 54%. This reflects strong business performance on cost and volume which is additionally supported by elevated commodity prices. The overwhelming response to the Vedanta’s $1 bn QIP, one of the largest in industry, underscores investor’s huge confidence. The proceeds from the QIP will be further instrumental in deleveraging balance sheet and reduction of finance cost. We have received all the requisite approvals and have filed the demerger scheme with the National Company Law Tribunal (NCLT) taking our demerger a step closer to reality.”

1QFY25 ESG Highlights

• Renewable Energy (RE): RE Power Delivery agreements (PDAs) of 1836 MW in place. Initiated utilization of renewable energy at HZL for its operations from RE-RTC projects. HZL already consumed c.8.5% RE power of total requirement in Q1 FY25 vs c.5.4% in Q4 FY24
• Gender Diversity: Achieved our workplace gender diversity target for full-time employees 7 years in advance. Gender diversity for full-time employees stands at 22% (FY24: 20%)
• Waste Utilization: HVLT waste usage at 80%; Sustained Fly ash utilization at 100+%
• Tree Plantation: 2.2 million trees planted as part of commitment to plant 7 million trees by 2030
• Women & Child Welfare: ~7,000 Nand Ghars created for women and child welfare
• CSR contribution: Spent INR 66 crore in Q1 FY’25 on CSR initiatives for communities, positively touching over 16 million lives

Consolidated Financial Performance –                                                

(In ₹ crore, except as stated) 

1. Excludes custom smelting at copper business.

2. Exceptional items Gross of Tax.

• Revenue:
• 1QFY25 consolidated revenue at ₹35,239 crore, up 1% QoQ and 6% YoY driven by favorable market prices.
• EBITDA and EBITDA Margin:

• 1QFY25 EBITDA increased by 15% QoQ to ₹10,275 crore mainly driven by higher output commodity prices partially offset by lower volumes.
• 1QFY25 EBITDA higher by 47% YoY on account of structural cost saving initiatives across businesses, easing of input commodity inflation, favorable output commodity prices.
• EBITDA margin¹ at 34% in 1QFY25, improved ~1000 bps YoY.
• Depreciation & Amortization:
• 1QFY25 Depreciation & Amortization ₹2,731 crore flat QoQ and increased 7% YoY mainly in oil and gas and increased capitalization at Zinc India.
• Finance Cost:

• 1QFY25 in line with average borrowings; lower by 8% QoQ due to one-time charges in 4QFY24.
• 1QFY25 higher by 5% YoY in line with increase in average borrowings.
• Investment Income:

1QFY25 higher by 37% QoQ and 47% YoY due to increase in average investments and interest on income tax refund in 1QFY25.

• Taxes:

Normalized ETR for 1QFY25 is 26% as compared to 32% in 4QFY24. Decrease is mainly due to change in profit mix.

• Profit After Tax:

            1QFY25 Profit after tax at ₹ 5,095 crore, higher 124% QoQ and 54% YoY. 

• Leverage, liquidity, and credit rating:

In 1Q FY25, ICRA Ratings assigned a rating of ICRA AA- while placing the ratings on Watch with Developing Implications.

Gross debt at ₹78,016 crore as on 30^th June 2024. 

Net debt at ₹61,324 crore as on 30^th June 2024. Net debt to EBITDA ratio improved to 1.5x vs  at 1.9x YoY.

Cash and cash equivalents position remain healthy at ₹16,692 crore, increased by ₹1,271 crore QoQ. The Company follows a Board-approved investment policy and invests in high quality debt instruments with mutual funds, bonds, and fixed deposits with banks.

CRISIL Ratings and India Ratings have maintained the ratings of Vedanta at CRISIL AA- and IND A+ respectively in 1Q FY25 while continuing on Watch with developing implications.