Vedanta Ltd. aims to generate $4 billion in pre-capex cash flow in financial year 2025 and continue to deleverage, senior officials told NDTV Profit.
"In the current year, our guidance has been $6 billion and that will lead to $4 billion in pre-capex cash flow," Group Chief Financial Officer Ajay Goel said on Tuesday, after the announcement of the company's first quarter results.
The focus of management is generating cash through volume and capital optimisation, said Executive Director Arun Mishra.
The company's net debt-to-Ebitda ratio has improved from 1.9 times last year to 1.54 times, Goel said. The three critical targets for Vedanta this fiscal are delivery, deleveraging and demerger, he said.
"We raised $1 billion in July through QIP and the entire proceeds will be used for deleveraging. The current cost-to-capital is 10% on a group basis and we want to bring it down to 9% by the end of this fiscal," he said.
The miner's net debt for the quarter stood at Rs 61,324 crore.
Vedanta is targeting $1.8 billion in capital expenditure this fiscal, of which nearly $1 billion will be spent on the aluminium business, while $400 million will be on oil and gas, and the remaining for businesses including iron ore, electrosteel and zinc, the CFO said.
Commenting on the ongoing demerger process, Mishra said it is on a fast-track basis and the company has completed its part of paperwork, with the proposal now with the NCLT. The official expects the demerger to be completed by the end of this fiscal.
Vedanta's profit rose in the first quarter, beating analysts' estimates, led by a tax write-back of Rs 735 crore. The metal producer's net profit surged 54.02% year-on-year to Rs 5,095 crore in the quarter-ended June. That compares with a Rs 2,353 crore estimate of analysts polled by Bloomberg.
Revenue from operations rose 6.02% to Rs 35,764 crore during the period. The company reported an inventory write-back of Rs 1,390 crore in the current quarter, while power and fuel costs were down 5% year-on-year.
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