Vedanta to cut cost of financing to 8.5%, says company CFO Ajay Goel

Time of India

4 days ago

Vedanta
will seek to reduce its cost of financing by at least a percentage point through the fiscal, bringing it down to around 8.5% by the end of the year, chief financial officer Ajay Goel said Thursday.
Vedanta's cost of financing was 9.6% at the end of the March quarter, which the resources conglomerate reduced to 9.2% in the June quarter.
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'While we delivered our highestever earnings before interest, taxes, depreciation, and amortisation (Ebitda) on a first-quarterly basis, with the falling commodities environment, our focus has been safeguarding margins through cost compression,' Goel told
ET
in an exclusive interaction. 'Despite pricing being unfavourable, our margin in this quarter vis-a-vis last year is higher by almost 81 basis points, which is a combination of a lower cost and better premium for LME,' he said.
To be sure, India's central bank reduced policy rates by a cumulative 100 basis points since February, although the benchmark US-10 year bond yields have remained rather firm through the first half of 2025 in the absence of further lowering of the rates by the Federal Reserve.
The company's consolidated revenue from operations rose 6% year-on-year to ₹37,434 crore for the June quarter, while profit for the period was ₹4,457 crore, down 12.5% as compared to the previous year.
Vedanta's consolidated Ebitda for the June quarter rose 5% onyear to ₹10,746 crore, while Ebitda margins at 35% were the highest in more than three years.
While net debt at the end of the June quarter rose to ₹58,220 crore from ₹53,251 crore at the end of the March quarter, the company's net debt to Ebitda ratio rose to 1.3 times from 1.2 times a quarter ago. At the end of the June quarter a year ago, the company's net debt was ₹61,324 crore, while the net debt to Ebitda ratio was 1.5 times.
The aluminium business is currently the largest in terms of both revenue and Ebitda for Vedanta, and it is working on cost efficiencies in this business as well. 'In case of aluminium, our refinery at Lanjigarh will be our single biggest activity to strategically bring costs down,' Goel said.
'If you see over the last eight odd quarters, the cost of production for aluminium has gone down from $2,400 per tonne to almost $1,850, and we will be going down to almost $1,750 by the second or third quarter,' he said.
The zinc business in India has historically been the largest for Vedanta, especially in terms of profitability, but aluminium now commands the top spot. These two businesses, both of which are currently expanding production capacities, will continue to bring in about 75 – 80% of profitability for Vedanta, Arun Misra, executive director at the company said.
Misra expects the current global trade uncertainties to resolve by the end of the current fiscal, and does not see much of an upside in commodity prices till then. 'Since we are focusing more on our domestic market and India's growth story amongst all emerging economies remains consistent and our government's focus on infrastructure creation is also consistent, we see our growth story going unaffected,' he said.
The company's consolidated revenue from operations rose 6% year-on-year to Rs 37,434 crore for the June quarter, while profit for the period was Rs 4,457 crore, down 12.5% as compared to the previous year.
Vedanta
announced its earnings during market hours on Thursday, and its shares extended losses to close at Rs 425.30 rupees on the BSE, down 2.2% from the previous close.