Vedanta Ltd Q4FY24 net profit drops 27% YoY to Rs 1,369 cr

This decline occurred against the backdrop of falling prices for key metals including zinc, copper, and aluminium, coupled with a subdued performance in the oil and gas segment.

The company had reported a profit of Rs 1,881 crore in the same quarter of the previous fiscal and Rs 2,013 crore in the third quarter.

Consolidated Revenue for the fourth quarter stood at Rs 34,937 crore, maintaining a flat growth compared to the previous quarter. However, it fell 6% YoY basis.

The Consolidated EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) reached Rs 8,969 crore, marking a 3% increase quarter-on-quarter, with an EBITDA margin of approximately 30%.

The company’s return on capital employed at around 23%, exhibiting an improvement compared to the previous quarter.

The net debt to EBITDA ratio also improved, standing at around 1.5x as opposed to 1.7x in the previous quarter, with net debt reduced by 10% quarter-on-quarter to Rs 56,338 crore.

Liquidity increased by 21% compared to the previous quarter, with a strong cash and cash equivalent position of Rs 15,421 crore.

Vedanta generated robust free cash flow (pre-capex) amounting to Rs 9,948 crore, marking an impressive 131% increase compared to the previous quarter.

For the fiscal year 2023-24, Vedanta reported its second-highest annual consolidated revenue ever, amounting to Rs 141,793 crore.

The company also achieved its second-highest annual EBITDA ever, reaching Rs 36,455 crore, marking a 3% increase.

The EBITDA margin improved to 30%, witnessing a rise of approximately 240 basis points. The return on capital employed stood at around 23%, marking a significant increase of around 240 basis points year-on-year.

Operational highlights for the fiscal year across key businesses:

In the Aluminium segment, Vedanta achieved its highest-ever annual aluminium cast metal production and alumina production. It sustained cost reduction for the seventh consecutive quarter, standing in the first quartile of the global cost curve.

In the Zinc India segment, Hindustan Zinc became the third-largest producer of Silver globally, achieving its highest-ever annual mined metal, refined metal, and silver production. It maintained a strong foothold in the first decile of the global zinc mines cost curve.

In the Oil and Gas segment, Vedanta commenced production at Jaya field, Gujarat, under India’s first Field Development Plan. It also witnessed an average daily gross operated production of 127.5 kboepd.

In the Iron ore segment, Vedanta reported its highest-ever Karnataka saleable ore production and sales, along with its highest-ever Pig Iron production.

In the Steel segment, Vedanta achieved its highest-ever annual saleable production and hot metal production, alongside its highest-ever annual dispatch.

Furthermore, Vedanta's Facor achieved an all-time high annual Ferrochrome production, with a new briquetting plant installed, contributing to its quarterly margin increase.

Vedanta's Copper India segment reported its highest-ever sales since the closure of Tuticorin operations and is evaluating legal remedies for a sustainable restart of the Tuticorin plant.

Management speak

On the financial results, Executive Director of Vedanta Arun said, “FY 2023-24 has been a remarkable year for Vedanta. We have achieved record production across our key businesses, a testament to our consistent focus on operational excellence.

“This focus, coupled with our commitment to cost leadership, ensured strong margins even during a challenging commodity market. We're especially proud of the Lanjigarh refinery expansion to 3.5 MTPA, taking us closer to a fully integrated 3 MTPA aluminum operation.

“The commencement of operations at the new Bicholim mine in Goa marks a significant step in our growth journey. HZL is now the world's 3rd largest silver producer. Our commitment to sustainability has been recognized globally – we topped the ESG rankings in India and ranked 3rd worldwide.

“This focus is further strengthened by securing 1,826 MW of renewable power through PDAs, with the first power delivery scheduled for Q1FY25. As we move forward, operational excellence, continued growth, and ESG leadership remains our strategic priorities. With this commitment, we are confident in delivering significant value for our shareholders in the coming year.”

Chief Financial Officer of Vedanta Ajay Goel said “Driven by operational excellence, Vedanta achieved outstanding financial results, marking the second highest annual revenue and EBITDA in our history, reaching Rs 1,41,793 crore and Rs 36,455 crore respectively.

“Through continued cost optimization, we achieved a remarkable EBITDA margin of 30% in FY24 with ~240 basis points annual margin expansion, underscoring our efficiency and agility. Moreover, our net debt/EBITDA ratio improved to 1.5x from 1.7x in December 2023.

“At Holdco, we deleveraged by $1.6bn in FY24 & through successful liabilities management, Vedanta has a balanced capital structure, and will remain committed towards value creation.”