Vedanta conducted conference call on 28 April 2022 to discuss the financial results and performance of the company for the quarter ended Mar'22. Mr. Sunil Duggal, Chief Executive Officer and Mr. Ajay Goel, Acting Chief Financial Officer of the company addressed the call

Highlights of the Concall

• The company achieved record consolidated revenue of Rs 39,342 crore in Q4FY22 with 41%YoY and 17% QoQ growth supported by higher sale volumes and improved commodity prices.

• Q4FY22 Consolidated EBITDA was up 51% YoY and 26% QoQ at Rs 13,768 crore mainly due to higher sales volume, supportive commodity prices and operational efficiencies despite higher cost of production amidst input commodity inflation.

• Power cost was stable QoQ due to higher delivery of linkage coal by Coal India.

• Q4FY22 Depreciation & amortisation increased by 16% YoY to Rs 2,379 crore, mainly due to increase in amortisation with increased Ore production at Zinc Business. On QoQ basis, it was up by 5% as impact of increased in Ore production at Zinc Business was partially offset by decrease in overall working interest production at Oil & Gas business.

• Net debt declined by Rs 3,435 crore YoY in FY22 to Rs 20,979 crore on 31st Mar 2022 driven by strong cash flow from operations after Rs 11,043 crore capex and Rs 19,356 crore dividend payout.

• FY22 normalized effetive tax rate is 28% (excluding Rs 178 crore tax on exceptional items) compared to 27% in FY21 (excluding Rs 3,111 crore deferred tax assets recognized on account of losses in steel business).

• The company has launched the low carbon aluminium under the brand ‘Restora' and ‘Restora Ultra'.

• The company would increase aluminum capacity by 0.3 mtpa with commissioning of line 6 of Jharsuguda smelter, increasing its total capacity to 1.8 mtpa by Q1FY23.

• The company alumina refinery phase II expansion from 2 mtpa to 6 mtpa is on track for completion by FY2024, making it fully integrated for alumina. The company has received the environment clearance to increase the capacity from 5 mtpa to 6 mtpa. It aims to reduce aluminum costs by US$100 per tonne from this expansion.

• The company expects aluminum production of 2.2-2.3 mtpa and alumina production guidance of 2.0-2.1 mtpa in FY23. It expects to keep costs under control led by higher domestic sourcing of bauxite and thermal coal.

• The company had bagged three coal blocks and production from the same is likely to start over the next two years for a total capex of Rs 3000 crore.

• The company has hedged 15% volumes for three main businesses with hedge levels of US$100 per barrel for Oil and gas, US$ 4100 per tonne for Zinc and US$3600 for aluminium. This will support profitability for FY23.

• The company expects capex of US$ 2.7 billion in FY23 including growth capex of US$2 billion primarily for completion of the ongoing projects in the oil and gas (US$0.6 billion) and aluminum (~US$1 billion) divisions. Growth capex for FY2022 stood at US$ 0.7 billion against a guidance of US$1.1 billion.

• Net debt at Vedanta Resources (VRL, the parent entity) is US$ 8.9 billion, of which US$ 2.7 billion maatures in FY23 and US$ 3 billion matures in FY24. Vedanta has currently paid a dividend of Rs 31 per share, which will lead to a payout of US$ 1 billion to the parent. The same will be used for the repayment of US$ 1 billion bonds due in Jul'22. VRL intends to repay debt worth US$ 4 billion over the next three years, of which it has now managed US$ 1 billion. The repayment will be through internal cash flows of Vedanta and will be front ended. With an additional US$ 1.7 billion due in the remainder of FY23, Vedanta can announce another round of dividend in H2FY23.