Vedanta's Q1 FY24 net profit declines 41% to ₹3,308 crore due to lower realisation

Vedanta Ltd, the metal, mining, and energy conglomerate, reported a significant drop in net profit for the June quarter, registering ₹3,308 crore compared to ₹5,592 crore in the same period last year. The decline was attributed to lower commodity prices and increased finance costs. Earnings before interest, taxes, depreciation, and amortization (EBITDA) also fell by 35% to ₹6,975 crore, with an EBITDA margin of 24% during the quarter.

The company's net sales decreased to ₹33,342 crore from ₹38,251 crore, mainly due to a substantial reduction in commodity prices, partly offset by favorable exchange rate movements. In response to the challenging financial results, Vedanta announced an interim dividend of ₹18.50 per share.

Sunil Duggal, Chief Executive Officer of Vedanta, expressed that the company is undergoing a transformational journey, experiencing significant growth in various business sectors, and venturing into technology-focused industries for future development.

Vedanta remains committed to maximizing shareholder returns by prioritizing low-cost operations and investing in skill development. Despite the challenges faced, the company delivered an EBITDA of ₹6,975 crore for the quarter, compared to ₹10,741 crore in the same period last year, primarily due to lower output, declining commodity prices, and reduced sales.

Finance costs increased to ₹2,110 crore from ₹1,206 crore, driven by an increase in the blended cost of borrowings and average borrowings. Meanwhile, investment income declined to ₹506 crore from ₹583 crore in Q1 FY23, influenced by changes in the investment mix and mark-to-market movement.