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Vedanta Q4 results: Net slips 27% to Rs 1,369 crore on Tuticorin impact – EQ

Vedanta Q4 results: Net slips 27% to Rs 1,369 crore on Tuticorin impact – EQ


In Short : “Vedanta’s Q4 results show a 27% decline in net profit to Rs 1,369 crore, attributed to the impact of Tuticorin operations, reflecting challenges in the company’s financial performance.”

In Detail : India-listed Vedanta reported a 27.2 per cent dip in its net profit for the quarter ended March 2024 (Q4FY24) as revenues took a hit. The company also stated that the proposed demerger of its businesses is on track for completion in the current calendar year.

For the quarter under review, Vedanta reported a net profit of Rs 1,369 crore, lower than the Rs 1,881 crore reported in the same period a year ago.

Net sales for the period were down 6.1 per cent on a year-on-year (Y-o-Y) basis, to Rs 34,937 crore. The company mentioned that Q4FY24 revenue was sequentially flat despite lower London Metal Exchange and exchange rate fluctuations.

Sequentially, the company’s net profit was down 32.1 per cent.

In its press statement, the company mentioned that the quarter also saw an exceptional loss of Rs 200 crore due to an impairment charge of Rs 994 crore mainly at Tuticorin, partially offset by capital creditors written back in the power sector of Rs 793 crore.

Earnings before interest, tax, depreciation, and amortisation, the company said, was at Rs 8,969 crore, down 4 per cent on a Y-o-Y basis.

Vedanta missed Street expectations for profit; in a Bloomberg poll, seven analysts estimated revenue of Rs 34,494 crore, and six analysts estimated adjusted net income of Rs 1,870 crore.

In September, the company proposed a vertical split of its businesses into six different listed entities.

In a call with analysts, the company’s management said that it has received no-objection approval from some of its private lenders and is in discussion with public lenders for the same.

Regarding the proposed divestment of its steel asset, company executives informed analysts that they expect to receive related green clearances in the current quarter.

“The divestment should happen in the current or next quarter, once the regulatory approval is in and if the buyers are ready,” said Arun Misra, executive director with Vedanta, on the call with analysts on Thursday.

The company stated that gross debt as of March 2024 was at Rs 71,759 crore, and net debt stood at Rs 56,338 crore, with cash and cash equivalents at Rs 15,421 crore.

For debt repayment, company executives mentioned in a call with analysts after Q4FY24 results announcements that they will deleverage by about $3 billion in the next three years at Vedanta Resources, to be met through a mix of brand fees and dividends from the Indian-listed entity.

Regarding India-listed Vedanta, company executives maintained that debt has peaked at FY24 levels, and future capital expenditure(capex) and debt servicing needs will be met through in-house sources.

In its presentation, the company stated that it will spend about $1.9 billion as capex in the current financial year and aims to spend $5 billion in the next decade towards decarbonisation initiatives.

Anand Gupta Editor - EQ Int'l Media Network