VEDL Q2 FY24 earnings call.
A source-linked concall view: reported numbers, management language, guidance, commitments and risks that should carry forward.
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Revenue
₹38,945 Cr
verified against source
Revenue YoY
—
reported change
EBITDA
₹11,834 Cr
latest reported figure
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Where this quarter sits.
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What the record says.
Vedanta delivered a standout Q2 FY24 with INR 38,546 crore in consolidated revenue and INR 11,834 crore EBITDA at a 35% margin—a strong quarter driven by favorable arbitration award in Oil & Gas (INR 4,600 crore gain), continued cost reduction across aluminum and zinc, and robust domestic demand. Aluminum CoP fell 6% QoQ and 25% YoY, while Hindustan Zinc maintained first-decile global cost positioning with 10% YoY CoP reduction. The demerger into six independent listed entities was filed in October 2023, representing a significant structural unlock. Management reaffirmed FY24 guidance and projects acceleration in volume growth as the Lanjigarh alumina expansion, BALCO smelter, and ferrochrome capacity ramp up over the next 12-18 months. Net debt reduced by INR 1,421 crore QoQ to INR 57,771 crore, with leverage at 1.64x. The primary risk remains Vedanta Resources' $1 billion bond maturity in January 2024 and $3.1 billion in FY2025 maturities, requiring continued refinancing execution amid volatile commodity markets.
Colored figures show movement against the previous available record.
Guidance to track
- First metal out expected by FY2025, part of the 1.5 million tonne total aluminum capacity addition planned across the portfolio.
- Train 1 of 1.5 MTPA on track for Q4 FY24, Train 2 of additional 1.5 MTPA expected in Q2 FY25, expanding captive alumina capacity from 2 MTPA to 5 MTPA.
- Board approved INR 2,650 crore CapEx for expansion from 150,000 tpa to 450,000 tpa, targeting leadership position in ferrochrome production.
- Management targets CoP reduction from current levels by approximately $200/tonne as captive coal mines (Radhikapur, Kuraloi) and Sijimali bauxite mine come online by FY2025.
Risks flagged
- Radhikapur and Kuraloi coal mines face Stage 1/Stage 2 forest clearance hurdles, potentially impacting aluminum cost reduction roadmap. Kuraloi targeted for Q1 FY25 start. Jamkhani operating at 2x capacity partially offsets delays.
- $1 billion bond due January 2024 requires refinancing. FY2025 has approximately $3.1 billion in maturities ($2 billion bonds, ~$500 million Oaktree, ~$600 million term loans). CFO expressed confidence but cost and execution risk remain.
- Production stuck at 135-140 kboepd for 4-5 quarters with natural decline. Maintaining volume requires $100-150 million annual CapEx for infill wells. Management did not provide volume growth timeline.
- Conversion of general reserve to retained earnings (RE) pending NCLT approval requiring creditor consent. No timeline committed. HZL RE conversion expected Q3 FY24. Vedanta Limited RE at only INR 2,400 crore as of September 2023.
Key quotes
- We delivered the highest ever second quarter consolidated revenue of INR 38,546 crore, up 16% quarter-on-quarter. We have also delivered highest ever second quarter EBITDA of INR 11,834 crore, up 70% quarter-on-quarter, and a strong margin of 35%.
- This entire INR 4,600 crore will be recovered in cash. As in future, we'll pay our PP to the government. Also, on a continuing basis, we'll have a gain on the profit and loss account, both profit and the cash, almost INR 20 million on an every quarter basis.
- In 2.5 years, we have de-leveraged VRL by $3.5 billion. So both in terms of value and the timescale, we are on plan, in fact, ahead of plan.
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