Vedanta Q1 Results: Profit Jumps 54% On Tax Write-Back, Beats Estimates

Vedanta Ltd.'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 2024, according to an exchange filing on Tuesday. That compared with 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 current quarter, while the power and fuel costs were down 5% year-on-year.

• Revenue rose 6.02% to Rs 35,764 crore (Bloomberg estimate: Rs 36,092 crore).

• Ebitda rose 55.68% to Rs 9,995 crore (Bloomberg estimate: Rs 9,627 crore).

• Ebitda margin at 27.94% versus 19.03% (Bloomberg estimate: 26.7%).

• Net profit rose 54.02% to Rs 5,095 crore (Bloomberg estimate: Rs 2,353 crore)

The rise in revenue was primarily driven by the aluminium and zinc, and lead and silver segments, which saw annual revenue growth of 13.52% and 11.3%, respectively, as the segments benefited from higher base metal prices during the quarter.

Moreover, the 5% reduction in power and fuel expenses bolstered the margin expansion.

Vedanta Ltd.'s aluminium production during the quarter stood 3% higher on a yearon-yyear basis at 596 kilo tonne, while the company's zinc production saw a 1% uptick to 262 kilo tonne over the same period.

The companies' production of iron ore and steel increased by 6% and 10% annually, respectively.

Vedanta's consolidated margins increased by 891 basis points to 27.94% in the first quarter, compared to 19.03% in the same quarter last year.

The company's aluminium cost of production stood 11% lower on an annual basis at $1,716 per tonne due to lower input commodity prices and higher operational and buying efficiency, as per the company. The India Zinc division's production cost was also 7% lower on an annual basis, at $1,107 per tonne.

It is key to note that the company had earlier been guided to reduce its aluminium cost of production in fiscal 2025 to $1,625–1,725 per tonne, and its Zinc India's cost of production to the range of $1,050–1,100 per tonne.

During the quarter, the company's total oil and gas production was 17% lower, at 112 thousand barrels of oil equivalent on an annual basis. The lower production was attributed to the natural decline in the company's reservoirs in Mangala, Bhagyam, and Aishwariya.

The company's operating expenses per barrel were 5% lower sequentially at $14.5, but higher on an annual basis.

Vedanta's net debt for the quarter stood at Rs 61,324 crore as its net-debt-to-Ebitda ratio improved to 1.5 times compared to 1.9 a year ago.

Vedanta is currently in the process of deleveraging its business, as evident from its Rs 8,500 crore QIP in July 2024. Over the next three years, the company plans to deleverage $3 billion from its holding company, Vedanta Resources.