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Business News/ Companies / Company Results/  Vedanta Q1 net profit falls 41% to 3,308 cr
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Vedanta Q1 net profit falls 41% to ₹3,308 cr

On its semiconductor manufacturing plans after the split with Taiwan’s Foxconn, Vedanta CEO said the firm is engaging with technology partners to build the semiconductor fab in Gujarat

File image (Reuters)Premium
File image (Reuters)

NEW DELHI:Vedanta Ltd posted a 41% drop from a year earlier in June quarter net profit at 3,308 crore amid lower commodity prices and higher finance costs. Earnings before interest, taxes, depreciation and amortization (Ebitda) fell 35% to 6,975 crore with an Ebitda margin of 24% during the quarter.

In a post-earnings interview, Sunil Duggal, chief executive at Vedanta said, “Fundamentally, these commodities have a very strong footing... I think future fundamentals are very strong. What we are doing good is adding value-added capacity, earning premiums, downstream, and integrating. So, this is what is easy internally because we don’t have any control over commodity prices."

On its semiconductor manufacturing plans after the split with Taiwan’s Foxconn, Duggal said Vedanta is engaging with technology partners to build the semiconductor fab in Gujarat. “As of now, we are in the process of engaging with the technology partners, both for the joint venture as well as providing the technology to us. The government has PIL schemes of providing 50% of the capital cost as the project subsidy. And the government of Gujarat also has a scheme where they would provide 40% of the subsidy provided by the government of India, as the subsidy by the state. So maybe overall 70%. On other infrastructure facilities like land, power, and water, for all these facilities, the state government will definitely help us," he said. He also confirmed Vedanta’s plan to sell ESL Steel Ltd.

It acquired the asset for 5,320 crore through a bankruptcy resolution process five years ago. Mint had exclusively reported it on Wednesday.

“...we are also doing the strategic valuation and we have appointed the banker that how and if anything we can do to monetise our Iron ore and steel assets, which can help us to de leverage and make us more smarter and better," Duggal told Mint.

A previous attempt to sell the asset in late December failed as certain approvals, including environmental clearance and expansion plan, were still pending, turning prospective buyers cautious.

The mandate for selling the asset in Bokaro, Jharkhand, is with bankers including Citigroup and JPMorgan’s India offices, Mint reported. The mandate may also include the iron ore mines in Goa and Karnataka, they said, adding that the details and contours of the asset will be known by mid-August. The price tag for ESL and the iron ore assets would be between $2 billion and $3 billion.

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ABOUT THE AUTHOR
Naman Suri
Naman is a skilled business journalist who excels in breaking down complex financial details. He specializes in the corporate sector, providing thorough coverage of the pharmaceutical industry, the dynamic field of sports business, and the fascinating area of white-collar crime. Naman has a knack for making sense of numbers and presenting them in an understandable way.
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Published: 21 Jul 2023, 10:58 PM IST
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