Vedanta Ltd posts a 37% rise in net profit for Q1 FY2025, contributed by aluminium business

On Tuesday, August 6, billionaire Anil Agarwal-led Vedanta Limited published its first quarter results ended June 30, 2024, emphasising increased net profit and revenue from operations, attributed to elevated metal prices.

In Q1 FY2024-25, Vedanta generated a consolidated net profit of INR 3,606 crore, an increase of 36.59 per cent from INR 2,640 crore a year ago. The company's revenue from operations rose 5.6 per cent Y-o-Y to INR 35,239 crore against INR 33,342 crore.

EBITDA also grew 47 per cent Y-o-Y on account of structural cost-saving initiatives across businesses, easing of input commodity inflation, and favourable output commodity prices. Vedanta's near-term goal is to achieve $10 billion EBITDA, of which aluminium is estimated to account for $4.2 billion, zinc and silver $2.7 billion, and oil and gas business $0.9 billion.

The surge in Vedanta's Q1 earnings was primarily contributed by core earnings from the aluminium business, as the latter soared by 144 per cent to INR 4,441 crore.

Chief Financial Officer Ajay Goel said: "This (earnings) reflects strong business performance on cost and volume, which is additionally supported by elevated commodity prices."

Vedanta Limited also reported an EBITDA margin of 34 per cent in Q1 FY2025, as against 24 per cent during the corresponding period of the previous year.

At the end of the June quarter, Vedanta's net debt totalled INR 61,324 crore, up by INR 4,986 crore, compared to a net debt of INR 56,338 crore as of March 31.

Arun Misra, Executive Director of Vedanta Ltd., 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 percent year-over-year reduction in overall cost."

In July, Vedanta raised INR 8,500 crore or $1 billion through a Qualified Institutions Placement (QIP), which opened on July 15 comprising 19.31 crore equity shares, each priced at INR 44.

In the same month, Vedanta's demerger plan also received clearance from the Bombay Stock Exchange and National Stock Exchange. According to the plan, Vedanta's businesses will split into six independent companies, focusing on specific sectors, including aluminium and oil & gas.