VEDL Q1 FY24 earnings call.
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Revenue
₹33,733 Cr
verified against source
Revenue YoY
—
reported change
EBITDA
₹6,975 Cr
latest reported figure
Source
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record provenance
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Where this quarter sits.
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What the record says.
Vedanta reported Q1 FY24 results with revenue declining to INR 33,342 crore due to subdued LME prices, though EBITDA margin held at 24% through cost controls and operational efficiency. PAT grew 6% sequentially to INR 3,308 crore, driven by lower input costs and marketing premiums. Net debt rose to INR 59,192 crore following external refinancing of the international zinc subsidiary ($850 million) and working capital build. Key strategic initiatives include board approval to enter semiconductor/display fab through Twin Star Technologies SPV acquisition, with potential 70% government subsidy support, and initiation of a steel portfolio strategic review expected within 4-6 months. Aluminum delivered record production of 579 KT with 6% CoP reduction, while Lanjigarh Train One expansion remains on track for Q2 completion. The pending CEO transition and elevated debt levels present near-term governance risks, while commodity price headwinds and multiple capital-intensive projects warrant close monitoring.
Colored figures show movement against the previous available record.
Guidance to track
- Management targets exiting FY24 with higher production than the level at which the year began, through infill wells and enhanced recovery projects.
- Expect approximately $50 per ton reduction in hot metal cost next quarter due to alumina supply stabilization following OMC mine normalization.
- Train One with 1.5 MTPA incremental capacity at Lanjigarh on track for Q2 FY24 completion; Train Two (additional 1.5 MTPA) expected by Q4 FY24.
- Zinc International targets start of production from Gamsberg Phase 2 expansion in second half of FY24.
Risks flagged
- LME prices for zinc and aluminum remain under pressure from weak global demand and high interest rates, impacting revenue in Q1. Management expects price stabilization in medium-to-long term.
- Net debt increased to INR 59,192 crore from INR 45,260 crore in Q4 FY23, driven by zinc subsidiary refinancing and working capital. Net debt/EBITDA at 1.88x.
- Board approved semiconductor/display fab acquisition but feasibility study incomplete, technology partnership not finalized, and no CapEx estimates provided. Timeline uncertain.
- Oil realization fell $7-8/bbl sequentially despite only $3/bbl decline in Brent crude, causing sharp EBITDA dip. Management committed to follow up but did not fully explain the disconnect.
Key quotes
- In the subdued LME environment in quarter one, we have delivered good set of financials. Our quarterly EBITDA is INR 6,975 crore, with an operating margin of 24% and PAT of INR 3,308 crore, marking a 6% increase sequentially.
- The brand and strategic management service agreement, it was up for renewal effective April 23. The revised rate has been duly considered, post external benchmarking by the Big Four firm, and based on which the board has approved the same. Now, as per SEBI LODR, the shareholder approval is only required if it goes beyond 5%.
- We have just instituted a study and evaluation by the bankers, and we have set up a timeline of three-six months for this. Based on what they will evaluate, what they will suggest, what value it can generate, the decision will be taken only at that point of time.
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