SSPL WEALTH PVT LTD

Hot Pursuit

Scrips, which has significant changes during the market hours.

Vedanta reports turnaround Q2 performance

08-Nov-24 15:30 Hrs IST

Revenue from operations jumped 10% YoY to Rs 37,171 crore in Q2 FY25, due to favourable output commodity prices, increased volume and premia.

Profit before exceptional item and tax (PBIT) fell 17.1% YoY to Rs 5,765 crore in Q2 FY25.

In Q2 FY25, exceptional gains stood at Rs 1,136 crore, due to impairment reversal in Oil & Gas business partly offset by impairment charge in ASI, and Cess in zinc & iron ore vide Supreme Court judgement to levy additional Cess on mineral-bearing land & mining rights.

EBITDA increased by 44% YoY to Rs 10,364 crore in Q2 FY25, majorly due to favourable output commodity prices, structural cost saving initiatives and increased premia across businesses. EBITDA margin improved by 900 bps to 34% in Q2 FY25 as against 25% in same quarter last year.

In Q2 FY25, depreciation & amortization Rs 2,696 crore increased 2% YoY mainly in Oil & Gas and increased capitalization at Aluminium.

In Q2 FY25, investment income increased 28% to Rs 722 crore in Q2 FY25 as compared with Rs 566 crore in Q2 FY24.

Arun Misra, executive director Vedanta, said, 'The second half of this year will be a transformative period with our major growth and integration projects coming online and ramping up. Through our structural interventions and initiatives, we have significantly reduced our cost of production over the past 12-15 months, and we will continue this trend in the coming quarters. As we move forward, operational excellence, sustained growth, and ESG leadership remain our strategic priorities. With a rich, diversified asset portfolio, a stronger balance sheet, and ongoing growth projects, we are well-positioned to deliver exceptional overall performance.'

Ajay Goel, CFO, Vedanta, said, 'This has been an outstanding quarter, highlighted by significant progress in our corporate and strategic initiatives, strong financial results, and excellent operational performance. We delivered our highest-ever 1H EBITDA of Rs 20,639 crore, up 46% YoY1 , with a robust 34% EBITDA margin and PAT before exceptional items of Rs 4,467 crore, a 230% YoY1 increase. This strong performance is driven by cost efficiency, volume growth, and favourable commodity prices. Additionally, we raised $1.4 billion at Vedanta through a $1 billion QIP and a $400 million HZL OFS. At the same time, with the $1.2 billion VRL bond issuance and ongoing deleveraging, we have reduced Holdco. debt to $4.8 billion, the lowest level in a decade. This positions us well to generate lasting value for our stakeholders, both now and in the years to come.'

Meanwhile, the company's board approved to acquire 100% stake in Sterlite Iron and Steel Company (SISCOL) for total consideration of Rs 1 lakh.

SISCOL incorporated by Sesa Resources (SRL), SRL is an unlisted wholly owned subsidiary of Vedanta. Accordingly, SISCOL shall become a step-down subsidiary of Vedanta. The transaction is done at arm's length based on fair valuation carried out by independent Chartered Accountant.

Further, the board approved the company's subsidiary, Bharat Aluminium Company (BALCO) to expand Smelter capacity by 435 KTPA, wired rod by 50 KTPA, Sow Ingot Capacity from 100 KTPA to 200 KTPA and billet by 420 KTPA.

Furthermore, the firms board approved to Rs 5,209 crore capital expenditure (Capex) (including Rs 565 crore of acquisition cost) for Athena Chhattisgarh Power Plant Project located in Sakti district, Chhattisgarh.

The power plant consists of two 600 MW units with unit 1 approximately 80% complete and unit 2 at 20%. The first unit of power plant is scheduled to go operational in the first quarter of FY 2025-26 followed by the second unit in the third quarter of FY 2025-26. Capex will be spread over upcoming financial years and financed through a combination of internally generated funds and borrowed capital. The plant benefits from a strategic location near water and coal resources.

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.