Vedanta Ltd. has posted a year-on-year decline in net profit to Rs 5,473 crore in the quarter ending June 30, 2023, as the mining company reported a 1.7 percent decline in revenue from operations to Rs 24,205 crore, down from Rs 24,609 crore in the quarter ending June 30, 2022.
But the company’s operational efficiency compensated for the poorer top-line performance. EBITDA (earnings before interest, tax, depreciation and amortisation) grew by 12.5 percent to Rs 8,501 crore from Rs 7,559 crore in the same period last year. Thanks to effective cost control measures in addition to a better mix of products, the company's EBITDA margin increased significantly to 35.1% from 30.7% a year ago. Vedanta reported strong performance across the key areas of operations - particularly aluminium and zinc - that helped to drive margin expansion despite pressure from the broader market.
For the earnings report, Vedanta's board of directors voted to divest the real estate business of the group into a new company called Vedanta Property Platforms Ltd. (VPPL) to unlock hidden value of excess land and property. The reorganization will be carried out in a formal way and all necessary regulatory and shareholder approval will be obtained.
Vedanta Chairman Anil Agarwal said the separation follows the recent successful restructuring of the group that had previously established independent pure-play businesses in oil and gas, aluminium, power, and steel. Agarwal said spinning off surplus real estate assets into the independent pure-play company will deliver long-term value to all parties involved.
Under the share-swap structure, Vedanta shareholders will get one equity share of Vedanta Property Platforms Ltd. for each 20 shares they hold in Vedanta Ltd., subject to final statutory approvals. The company will begin a regulatory process including filing necessary documentation with the stock exchanges in August as it moves toward unlocking asset value.
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