Billionaire Anil Agarwal's Vedanta Ltd reported a 27 percent decline in fiscal fourth-quarter profit, driven by surging finance costs and weak prices of metals such as zinc, copper, and aluminium.
Net profit fell to Rs 1,369 crore for the quarter ended March 31 from Rs 1,881 crore in the year earlier. It reported a Rs 2,013 crore profit in the preceding December quarter.
Revenue from operations fell 6 percent to Rs 34,937 crore in the March quarter. Sequentially, revenue remained little changed.
The company said that short-term and long-term demand remains robust in India. "The demand is expected to remain strong in upcoming years due to thriving infrastructure, manufacturing, automobile and EV/renewable sectors," Vedanta said in an investor presentation.
Consolidated EBITDA fell 4 percent to Rs 8,969 crore in the quarter from a year earlier.
The mining conglomerate expects the demerger of five of its key businesses, including aluminium, oil and gas, and steel, into separate listed entities to be completed by December 2024, chairman Anil Aggarwal said in a letter to stakeholders last week.
Debt and cash flow
Vedanta reported a reduction in net debt to Rs 56,338 crore as of March 31, down Rs 6,155 crore from the preceding three months. The company also noted an improvement in its net debt to EBITDA ratio from about 1.7 times as of December 31 to about 1.5.
The company said it generated free cash flow (pre-capex) of Rs 9,948 crore amid plans to strengthen the debt-laden conglomerate's balance sheet through increased cash flows and deleveraging strategies. Chairman Anil Aggarwal said in a letter to stakeholders that FY25 will be a "transformative year" for the mining company.
Meanwhile, the company booked an impairment charge of Rs 994 crore majorly at Tuticorin, resulting in an one-time loss of Rs 201 crore in the March quarter.
As of March 31, cash and cash equivalents stood at Rs 15,421 crore. The company expects capital expenditure of $1.9 billion for FY25, with the highest allocation of Rs $800 million for artificial intelligence and power.
Production growth
In the March quarter, Vedanta's aluminium business recorded an 18 percent surge in volumes at the Lanjigarh unit over the previous year. The unit is in focus since Vedanta expanded its refining capacity to 3.5 mtpa.
The company said it recorded its highest-ever quarterly refined metal production at 273 kt, up 6 percent from the decemeber quarter on account of better plant availability, and up 1 percent from the pervious year. For Zinc international, total production was down 47% in Q4 due to lower grades, recoveries.
Meanwhile, Vedanta's oil and gas unit reported a 14 percent fall in average gross operated production to 117.8 thousand barrels of oil equivalent per day in the March quarter from a year earlier.
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