Vedanta posts 78% profit jump in Q2, revenue up 57%

Vedanta Ltd said its consolidated net profit rose 78% year-on-year to Rs 6,202 crore in the September-ended quarter, up from Rs 3,479 crore a year earlier. Revenue from operations increased 57% to Rs 26,356 crore, while EBITDA more than doubled to Rs 9,938 crore, lifting the margin to 60%.

The company attributed the stronger results to higher commodity prices, favourable foreign-exchange movements and higher production across its businesses. Finance costs fell 9% to Rs 696 crore and investment income rose 44% to Rs 495 crore. Depreciation and amortisation grew 19% to Rs 1,339 crore, reflecting higher ore output at Hindustan Zinc.

Zinc India contributed significantly, with revenue up 76% to Rs 14,525 crore and EBITDA more than doubling to Rs 9,243 crore. Mined metal production reached a record 2,71,000 tonnes, and refined output rose 7% to 264,000 tonnes. The cost of zinc production fell 29% year-on-year to $703 per tonne, while average zinc and silver prices rose 35% and 59% respectively.

Zinc International reported a 40% revenue increase to Rs 1,730 crore and a 47% rise in EBITDA to Rs 550 crore, aided by the commissioning of the second phase of the Gamsberg project in South Africa, which added 200,000 tonnes of annual capacity. The copper segment saw revenue grow 41% to Rs 9,280 crore, with EBITDA turning positive at Rs 80 crore after a loss a year earlier.

Vedanta’s balance sheet improved as net debt declined by Rs 4,624 crore to Rs 3,675 crore, reducing the net-debt-to-EBITDA ratio to 0.1 times. Cash and cash equivalents rose to Rs 26,622 crore. Free cash flow before capital expenditure reached Rs 5,803 crore.

"Strong cash generation of Rs 5,803 crore during the quarter enabled us to reduce net debt by Rs 4,624 crore to Rs 3,675 crore," said Ajay Goel, Group CFO of Vedanta. He added that the company’s businesses across Hindustan Zinc, Zinc International, FACOR, copper and ports offer further growth opportunities.