In a significant setback, metals conglomerate Vedanta Ltd has reported a steep 40% decline in its consolidated net profit for the first quarter ending June 30, 2023. The company’s net profit stood at Rs 2,640 crore, down from Rs 4,421 crore in the same period last year. This development comes amidst challenging market conditions and rising input costs, affecting the company’s overall financial performance.
The quarterly results also revealed a notable drop in Vedanta’s consolidated revenue from operations, which declined by 13% to Rs 33,342 crore in Q1FY24 compared to Rs 38,251 crore in Q1FY23. The combination of lower net profit and reduced revenue highlights the difficulties Vedanta faced during the quarter under review.
Despite the unfavorable financial results, Vedanta declared an interim dividend of Rs 18.5 per share, aiming to bolster investor confidence and maintain shareholder interest. However, the company’s share price on the Bombay Stock Exchange (BSE) closed 1.4% lower at Rs 278.15, indicating some apprehension among investors about the recent performance.
The quarter did see a one-time gain of Rs 1,780 crore for Vedanta in June, which provided some respite amidst the challenges faced by the company. Nevertheless, the management remains determined to steer the company towards growth and sustainability.
Sunil Duggal, the Chief Executive Officer of Vedanta, expressed optimism about the future despite the current setbacks. He mentioned that the company is on a transformational journey, emphasizing growth across its various businesses and diversification into technology-focused sectors to enable future growth.
Mr. Duggal reiterated Vedanta’s commitment to maximizing shareholder returns through cost-effective and best-in-class operations, as well as focusing on skill development and global leadership with sustainability at the forefront. The company aims to achieve operational excellence and enhance competitiveness in the market, despite the challenges posed by the industry’s dynamic nature.
During the first quarter of the fiscal year, Vedanta managed to deliver Rs 6,975 crore in earnings before interest, taxes, depreciation, and amortization (EBITDA) with an operating margin of 24%. The company’s profit after tax (PAT) stood at Rs 3,308 crore, showing a 6% increase sequentially.
While the current financial results present a challenging scenario, Vedanta’s management remains optimistic about the future. They plan to continue their efforts to lead the way toward a more sustainable and responsible future. However, it is worth noting that Mr. Sunil Duggal, the CEO, will be retiring as a whole-time director and CEO of Vedanta, effective July 31, 2023.
Despite the challenges faced by Vedanta in Q1FY24, the company’s management and stakeholders are hopeful that their strategic focus on sustainability and growth will help navigate the volatile market landscape and set the company back on a path of profitability and success.
