Vedanta Q2 Results: Company is back in black with Rs 5,603 crore net profit, aims to cut more debt

Vedanta Ltd is targeting to bring down its debt to operating profit ratio to below 1 in two years from 1.5 times as of September 30, its lowest in six quarters, said chief financial officer Ajay Goel.

Despite a dividend payout of more than ₹12,000 crore during the quarter, the company managed to bring down its debt on a sequential basis by using proceeds from its QIP issue, funds from the stake sale in Hindustan Zinc, and its free cash flow. Net debt fell to ₹56,927 crore at the end of the September quarter from ₹61,324 crore a quarter ago. The net debt is lower than the previous year’s ₹57,771 crore as well.

The company reported its earnings for the September quarter on Friday, clocking in a consolidated net profit of ₹5,603 crore against a loss in the year-ago period. The consolidated operating profit jumped 44% on-year to ₹10,364 crore, while revenue from operations was 10% higher at ₹37,171 crore.


Vedanta’s consolidated operating profit for the first half of the year was at an all-time high of ₹20,639 crore, and Goel is optimistic about the second half being even stronger. The company’s consolidated operating profit was at ₹14,172 crore in the first half of last year, excluding the impact of a onetime gain.

“More than half, almost 65% Ebitda is now agnostic to pricing environment, and is mostly driven by initiatives by Vedanta which are either structured or sustainable,” Goel told ET.

He expects the company’s operating profit for the full year at $6.5 billion (approximately ₹54,800 crore).

Vedanta plans to spend $1.9 billion on capital expenditure in the current fiscal, and $5 billion in three years after that, across its portfolio.

“With the current environment, when Ebitda is $6.5 billion on a yearly basis, it leads to about $3.5 billion free cash flows. So the entire capex programmes in future will be funded through free cash flows from operations,” Goel said.

The company reported its earnings for the September quarter on Friday, clocking a consolidated net profit of Rs 5,603 crore against a loss in the previous year. Consolidated operating profit jumped 44% on-year to Rs 10,364 crore, while revenue from operations were 10% higher at Rs 37,171 crore.

Vedanta Resources

Vedanta Resources, the holding company of India-listed Vedanta Ltd, had targeted cutting down its external debt by $3 billion in three years starting from April 2024, when it had an external debt of $5.8 billion.

It has already cut debt by $1 billion since then, and had an external debt of $4.8 billion at the end of September, its lowest in a decade. Over the last two and a half years, the company has managed to cut external debt by $4.7 billion.