Vedanta Q1 PAT jumps 54% YoY to Rs 5,095 cr

Revenue from operations grew by 5.68% YoY to Rs 35,239 crore in Q1 FY25.

The company’s EBITDA surged by 47.31% to Rs 10,275 crore in Q1 FY25 as compared to Rs 6,975 crore posted in Q1 FY24. EBITDA margin improved to 34% in Q1 FY25 as against 24% recorded in Q1 FY24. The increased in EBITDA was on account of structural cost saving initiatives across businesses, easing of input commodity inflation, favorable output commodity prices.

Depreciation & Amortization for Q1 FY25 increased by 7% YoY to Rs 2,731 crore, mainly in oil and gas and increased capitalization at Zinc India.

In the first quarter of FY25, investment income grew by 47% YoY to Rs 742 crore as compared to Rs 506 crore posted in Q1 FY24. This growth was driven by a rise in average investments and interest on income tax refunds during the period.

The company's gross debt stood at Rs 78,016 crore while net debt was at Rs 61,324 crore as on 30 June 2024. Net debt to EBITDA ratio improved to 1.5x in Q1 FY25 as against 1.9x in Q1 FY24.

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

Regarding the expansion of Lanjigarh project - Train 1 of 1.5 MTPA is complete and has commenced production in Q1 FY 2025. Train II is expected to be completed in the coming quarters to take the alumina capacity to 5 MTPA from current level of 2 MTPA at the overall project cost of Rs 6,585 crore.

Arun Misra, executive director of Vedanta, said, “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.”

Ajay Goel, chief financial officer (CFO) of 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 billion 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.”

In Cairn Oil & Gas business, the company’s board approved capex investment (net) of $270 million across fields in the Rajasthan block for drilling wells and construction of surface facility for ASP injection. The projects timeline is 12-30 months and will be funded through internal accruals. The strategic priority for the Cairn Oil & Gas business is to augment reserves and increase near term volume through infill wells and enhanced oil recovery.

Meanwhile, the company’s board approved a wholly owned subdiairy, Western Cluster (WCL), Liberia to scale up its iron ore production capacity in Liberia and to add premium products in portfolio, it will add 3 MTPA capacity at a total estimated cost of $280 million. The projects timeline is set within 18 months and the funding will be a combination of debt and internal accruals/equity infusion. With the completion of this project, WCL will be placed in high premium product segment & the output will be a feed for manufacture of “Green Steel”.

Vedanta, a subsidiary of Vedanta Resources, is one of the world's leading oil & gas and metals company with significant operations in oil & gas, zinc, lead, silver, copper, iron ore, steel, and aluminium & power across India, South Africa and Namibia.

The scrip closed 0.08% higher at Rs 414 on the BSE.