We had a strong operational and financial performance in FY 2023-24 amidst the challenges faced due to macroeconomic uncertainty. We remained focussed on controllable factors, including resetting the cost base through diverse cost optimisation initiatives, disciplined capital investments, working capital management, marketing initiatives, and volume control, all the while ensuring safe operations in line with Government and corporate guidelines.
In FY 2023-24, we recorded an EBITDA of ₹ 36,455 crore, marking a 3% increase Y-O-Y, with a robust double digit adjusted EBITDA margin1 of 30%. (FY 2022-23: ₹ 35,241 crore, margin 28%). This growth was primarily attributed to the softening of input commodity prices coupled with cost savings, one time arbitration award in Oil & Gas business and rupee depreciation partially offset by slip in commodity prices primarily of aluminium, zinc and brent and strategic hedging gain recognised in previous year.
Cost savings resulted in increase in EBITDA by ₹ 1,508 crore, driven by Aluminium partially offset by Iron Ore and Zinc business.
Market factors resulted in decrease in EBITDA by ₹ 1,817 crore. This was primarily driven by decrease in output commodity prices partially offset by softening of input commodity prices and rupee depreciation.
Gross debt as on 31 March 2024 was ₹ 71,759 crore, increase of ₹ 5,577 crore since 31 March 2023, driven mainly by increase at THL Zinc Ventures, Meenakshi Energy and Balco, partially offset by reduction of debt at HZL and CIHL. Meanwhile, our Net debt as on 31 March 2024 was ₹ 56,338 crore, increased by ₹ 11,078 crore since 31 March 2023 (FY 2022-23: ₹ 45,260 crore), primarily due to capex outflow and return to shareholders, partially offset by cash flow from operations and working capital release.
Despite these dynamics, Vedanta Limited's balance sheet remains robust, boasting cash and cash equivalents of ₹ 15,421 crore and a Net Debt to EBITDA ratio of 1.5x (FY 2022-23: 1.3x).
1. Excludes custom smelting at copper business.
Commodity price fluctuations have a significant impact on the Group’s business. During FY 2023-24, we saw a net negative impact of ₹ 12,438 crore on EBITDA due to slip in commodity prices.
Zinc, lead and silver : Average zinc LME prices during FY 2023-24 decreased to US$ 2,475 per tonne, down 25% Y-O-Y; lead LME prices increased to US$ 2,122 per tonne, up 1% Y-O-Y; and silver prices increased to US$ 23.55 per ounce, up 10% Y-O-Y. The cumulative impact of these price fluctuations decreased EBITDA by ₹ 4,852 crore.
Aluminium: Average aluminium LME prices decreased to US$ 2,200 per tonne in FY 2023-24, down 11% Y-O-Y, this had a negative impact of ₹ 5,270 crore on EBITDA.
Oil & Gas: The average Brent price for the year was US$ 83 per barrel, down 13% Y-O-Y. This had negative impact on EBITDA by ₹ 1,645 crore.
Iron & Steel: Lower realisations negatively impacted EBITDA at ESL by ₹ 974 crore. Higher realisations positively impacted EBITDA at Iron Ore by ₹ 607 crore.
Prices of key raw materials such as imported alumina, thermal coal, carbon and coking coal have decreased in FY 2023-24, positively impacting EBITDA by ₹ 8,364 crore, primarily at Aluminium, Zinc and Iron & Steel business.
Rupee depreciated against the US dollar during FY 2023-24. Stronger dollar is favourable to the Group’s EBITDA, given the local cost base and predominantly US dollar-linked pricing. The favourable currency movements positively impacted EBITDA by ₹ 2,257 crore.
Lower volume led to decrease in EBITDA by ₹343 crore by following businesses:
Oil & Gas (negative ₹618 crore): In FY 2023-24, sales reduced from 91 Kboepd to 82 Kboepd
ZI (negative ₹489 crore): In FY 2023-24, MIC sales lowered to 209 kt, down 24% Y-O-Y
Partly offset by: Aluminium (positive ₹ 249 crore): In FY 2023-24, Aluminium sector achieved sales of 2,357 kt, up 3% Y-O-Y
Iron Ore (positive ₹ 229 crore): In FY 2023-24, Iron Ore Karnataka achieved sales of 5.9 million tonnes, up 19% Y-O-Y and Pig Iron achieved sales of 836 kt, up 23% Y-O-Y
HZL (positive ₹ 144 crore): In FY 2023-24, HZL achieved silver sales of 746 tonnes, up 4% Y-O-Y
Lower cost resulted in increase in EBITDA by ₹ 1,508 crore during FY 2023-24, primarily due to cost savings at Aluminium partially offset by higher cost at Iron Ore, Zinc and Oil & Gas business.
This primarily includes one-time arbitration award in Oil & Gas business partially offset by strategic hedging gain recognised in previous year, impacting EBITDA positively by ₹ 1,866 crore.
Revenue for the year was ₹ 1,41,793 crore, lower 2% Y-O-Y. This was primarily driven by lower output commodity prices primarily of zinc, aluminium and brent, partially offset by higher volume at Aluminium, Copper and Iron Ore business and rupee depreciation.
EBITDA for the year was ₹ 36,455 crore, 3% higher Y-O-Y. This was mainly due to softening of input commodity prices coupled with strategic cost savings, one time arbitration award in Oil & Gas business and rupee depreciation partially offset by slip in commodity prices primarily of aluminium, zinc and brent and strategic hedging gain recognised in previous year.
We maintained a robust adjusted EBITDA margin1 of 30% for the year (FY 2022-23: 28%)
1. Excludes custom smelting at copper business.Depreciation for the year was ₹ 10,723 crore compared to ₹ 10,555 crore in FY 2022-23, higher by 2%, primarily due to increase in ore production at Zinc India and higher capitalisation at Aluminium business.
The blended cost of borrowings was 9.65% for FY 2023-24 compared to 7.8% in FY 2022-23.
Finance cost for FY 2023-24 was ₹ 9,465 crore, 52% higher compared to ₹ 6,225 crore in FY 2022-23 mainly on account of increase in average borrowings and cost of borrowings.
Investment income for FY 2023-24 stood at ₹ 2,341 crore, 18% lower compared to ₹ 2,851 crore in FY 2022-23. This was mainly due to decrease in average investments partly offset by mark to market movement.
The exceptional items for FY 2023-24 was at ₹ 2,803 crore, mainly on account of impairment reversal in Oil & Gas, foreign currency translation gain on redemption of optionally convertible redeemable preference share and liability for capital creditors written back in Power segment partly offset by impairment in Copper, Aluminium and Zinc International.
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Tax expense for FY 2023-24 stood at ₹ 12,826 crore (FY 2022-23: ₹ 5,770 crore). The normalised ETR is 36% as compared to 30% in FY 2022-23 due to change in profit mix and reversal of deferred tax assets.
Attributable PAT before exceptional items was ₹ 7,956 crore in FY 2023-24 compared to ₹ 10,521 crore in FY 2022-23.
Earnings per share before exceptional items for FY 2023-24 was ₹ 21.40 per share as compared to ₹ 28.36 per share in FY 2022-23.
Board has declared total dividend of ₹ 29.50 per share during the reporting period.
Total shareholders fund as on 31 March 2024 aggregated to ₹ 30,722 crore as compared to ₹ 39,423 crore as of 31 March 2023. This was primarily driven by net profit attributable to equity holders earned, partially offset by dividend paid during the reporting period.
The net fixed assets as on 31 March 2024 were ₹ 1,21,852 crore. This comprises ₹ 20,331 crore as capital work-in-progress.
Our financial position remains strong with cash and liquid investments of ₹ 15,421 crore.
The Company follows a Board-approved investment policy and invests in high quality debt instruments with mutual funds, bonds, and fixed deposits with banks.
Gross debt as on 31 March 2024 was ₹ 71,759 crore, an increase of ₹ 5,577 crore since 31 March 2023. This was mainly due to increase of debt at THL Zinc Ventures, Meenakshi Energy and Balco partially offset by reduction of debt at HZL and CIHL.
Gross Debt comprises term debt of c. ₹ 69,062 crore, working capital loan of c. ₹ 1,159 crore and short-term borrowing of c. ₹ 1,538 crore. The loan in ₹ currency is 82% and balance 18% in foreign currency. Average debt maturity of term debt is ~c. 3 years as of 31 March 2024.
