Vedanta’s April-June Earnings Surge on Cost Reduction Initiatives

Indian diversified mining giant Vedanta Resources has reported a significant increase in earnings for the April-June quarter, the first of its financial year, driven by a successful cost reduction program that boosted margins compared to the same period in 2023.

Vedanta announced consolidated earnings before interest, tax, depreciation, and amortization (Ebitda) of ₹10,275 crore ($1.22 billion) for the quarter, marking a 47% year-on-year increase and a 15% rise from the previous quarter. The company's revenue also saw a notable rise, with earnings growing by 6% year-on-year to ₹35,239 crore, a 1% increase from the previous quarter.

The strong financial performance exceeded market expectations, leading to a more than 4% rise in Vedanta's share price as investors reacted positively to the results. Executive Director Arun Misra attributed the impressive earnings to the company’s strategic emphasis on cost control, which resulted in a 20% reduction in costs compared to the first quarter of the 2023-24 financial year.

In addition to cost management, Vedanta also reported increases in production across several key commodities. Alumina production surged by 26% year-on-year to 539,000 tonnes, driven by capacity expansions, while primary aluminium output grew by 3% to 596,000 tonnes. Refined zinc production reached 211,000 tonnes, up 1% from the previous year, and refined lead output increased by 2% to 51,000 tonnes.

However, the company faced challenges in its iron ore segment, with saleable output totaling 1.3 million tonnes, a 27% decrease from the previous quarter. This decline was primarily due to a government-ordered suspension of mining activities in Karnataka’s Chitradurga district in late April, which was later lifted on May 21.

Vedanta's strong earnings and strategic cost management highlight its resilience in a volatile market environment, positioning the company well for the remainder of the financial year.