Earnings Review
High volume, metal prices spur Vedanta sales, EBITDA growth
This story was originally published at 17:09 IST on 31 January 2025
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--Vedanta Oct-Dec consol net profit INR 35.47 bln
--Analysts saw Vedanta Oct-De consol net profit INR 31.81 bln
--Vedanta Oct-Dec consol net profit INR 35.47 bln vs INR 20.13 bln year ago
--Vedanta Oct-Dec consol revenue INR 391.15 bln vs INR 355.41 bln year ago
--Vedanta Apr-Dec consol net profit INR 115.05 bln vs INR 28.70 bln year ago
--Vedanta Apr-Dec consol revenue INR 1.125 tln vs INR 1.082 tln year ago
--Vedanta Oct-Dec zinc, lead, silver India sales INR 83 bln vs INR 70.5 bln
--Vedanta Oct-Dec consol aluminium sales INR 153.06 bln vs INR 121.22 bln
--Vedanta Oct-Dec consol EBITDA INR 112.84 bln, up 30% on year
--Vedanta Oct-Dec consol EBITDA margin 34%, up 517 bps on year
--Vedanta Oct-Dec aluminium production 613,000 tn, up 2% on year
--Vedanta net debt INR 573.58 bln on Dec 31 vs INR 569.27 bln on Sept 30
--Vedanta Oct-Dec aluminium ops EBITDA INR 45.40 bln, up 58% on year
By Rajesh Gajra
NEW DELHI – Aided by high volume growth in aluminium and alumina, and higher prices of key metals such as aluminium and zinc, Vedanta Ltd., a diversified metals-to-power company, reported the highest revenue growth in nine quarters for the December quarter. But market expectations were higher as its reported revenue numbers missed the Street view. The bottom line growth was strong, largely tracking the revenue growth and rise in operating profit.
The company's consolidated revenue from operations increased 10% on year to INR 385.26 billion in the December quarter, missing analysts' estimate of INR 392.21 billion. It was, however, the highest revenue growth in nine quarters. Vedanta's consolidated net profit rose 76% on year to INR 35.47 billion, beating the Street estimates' average of INR 31.81 billion.
The bottom line growth was largely aided by a jump of 30% in earnings before interest, tax, depreciation, and amortisation to INR 112.84 billion. Sequentially, EBITDA increased 9% on the back of a 3.7% increase in revenue, while the net profit declined 19%.
Vedanta's Chief Financial Officer Ajay Goel said in an earnings press release that the December quarter performance of the company was "stellar" as it delivered the highest EBITDA of INR 112.84 billion, jumping 30% on year, "with a robust (consolidated) EBITDA margin of 34%", up 517 basis points on year. This performance, according to Goel, was "driven by our focus on cost efficiencies, volume growth, and favourable commodity prices." Sequentially, the EBITDA margin was flattish.
In the December quarter, the revenue from India zinc, lead, and silver rose 18% on year to INR 83 billion, while that from aluminium rose 26% to INR 153.06 billion. In volume terms, alumina production increased 7% on year and aluminium production was up 2%. Saleable refined production was flat but steady, while saleable refined lead volume declined 2% on year and saleable refined silver production fell sharply by 18% on year.
The copper segment of the company also registered strong sales growth with revenue increasing 8% on year to INR 58.03 billion, even though sales volume was down 11%, data from the company's investor presentation showed. Barring zinc, lead and silver, copper, and aluminium segments, the company's performance was weak in other segments.
In Vedanta's oil and gas segment, the revenue fell 22% on year to INR 26.36 billion in the December quarter, as the total oil and gas gross operated production declined 19% on year and total oil and gas working interest production fell 18% on year. The company's revenue from iron ore and steel also slackened in the December quarter, with iron ore revenue falling 25% on year to INR 18.65 billion rupees, while steel revenue was down 2% at INR 21.50 billion.
Iron ore sales volume fell 11% on year, and the steel segment's sales volume declined 6% on year. In Vedanta's ferro alloys business, the revenue fell 16% on year to INR 1.78 billion, due to a 14?ll in sales volume.
Profitability varied across the company's segments. The aluminium segment's EBITDA surged 58% on year to INR 45.40 billion in the December quarter, aided by an 18% on-year increase in aluminium prices on LME.
The India zinc segment recorded a 28% rise in EBITDA to INR 45.32 billion on the back of a 22% rise in zinc prices on LME during the quarter. Copper segment's EBITDA, however, fell 43% on year to INR 40 million. The EBITDA of the oil and gas segment of the company declined 5% to INR 12.01 billion.
In Apr-Dec, Vedanta's consolidated net profit was INR 115.05 billion, substantially rising 4 times from the same period in the previous year. During the same period, the consolidated revenue of the company was up only 3.8% on year at INR 1.109 trillion.
Shares of Vedanta ended Friday 2.1% higher at INR 441.40 on the National Stock Exchange. End
Edited by Tanima Banerjee
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