Anil Agarwal-led Vedanta Ltd. has unveiled its strategic plans, which have positioned the company for robust growth and good financial strength. Vedanta, one of the leading global diversified natural resources companies, ended the fourth quarter and full fiscal year 2023-2024(FY24) with outstanding financial outcomes.
Interim Dividend: ₹4,000 Crore Payout
Vedanta declared an interim dividend of ₹11 per share for 2024-25. This action will lead to an outflow of ₹4,089 crore from the company’s treasury. The dividend payout indicates that Vedanta is focused on acknowledging its shareholders and maintaining a history of dividend payments.
Capital Raise: ₹8,500 Crore Investment
Vedanta is gearing up to raise ₹8,500 crore through equity or Debt. The money injection will be used to finance new projects and strategic efforts. The company aims to develop new territories, especially in Saudi Arabia. Vedanta Copper International VCI Co. Limited (VCI) intends to build a modern copper rod manufacturing plant in KSA with 125 KTPA (kilotons per annum).
Vedanta’s Historical Dividends
Vedanta has a proven history of paying out significant dividends. It made aggregate dividend payments totaling ₹29 in FY24. 50/- per share in the previous year, and it paid a Dividend of ₹101. 50 per share. These dividends have always been over the company’s earnings per share, and it looks like Vedanta is providing funds to its UK Parent company, Vedanta Resources, which is facing cash crunches.
Strategic Outlook
In spite of weak Q4FY24 earnings, Vedanta stays committed to strategic de-leveraging, capacity up-scaling, and cost reduction. The cost efficiency of the aluminum and zinc segments is on the rise, which results in the company’s good performance. Management’s vision is centered on improving efficiency and increasing growth in short-term goals.
Vedanta’s current financial performance
Vedanta reported its Q3 EBITDA as ₹8,969 crores, which is 3% more QoQ. The strong EBITDA margin was maintained at around 30%, enlarging by ~75 base points.
The company recorded the highest consolidated quarterly revenue of ₹39,342 crore, representing a 41% increase over the same period last year. Vedanta’s highest-ever quarterly EBITDA has been recorded at 13,768 crores, representing an impressive 51% year-over-year growth.
Profit after tax (PAT), before exceptional and one-time tax credit, grew to ₹7,570 crore, a 48% increase compared to the previous year. Net Debt stood at ₹20,979 crores, a decline of ₹6,590 crores over December 31, 2021.
Conclusion
Vedanta’s dividend payout and capital raise highlight its devotion to shareholders and strategic growth. Investors are keen to see how the company progresses as it becomes an increasingly influential player in the metals and mining sector.
Image Source: The Hindu Business Line
