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Vedanta reported a reduction in operating profits by 22% to INR 352bn ($4.3bn) in financial year 2023. ET notes that this would dent Vedanta’s ability to service its debt. With the drop in EBITDA, the company saw its interest coverage ratio drop to 8.2x from 15x a year ago. The drop in profits comes on the back of an increase in raw material costs whilst prices of metals like aluminum, lead and silver dropped, thereby compressing margins. Vedanta’s Anil Agarwal only recently said that the company plans to commit $1.7bn in FY2024 for capex growth projects and the reduction in profits may raise questions on these capex plans. Separately, the company said it will not sell its Sterlite Copper Plant in Tamil Nadu after rumors emerged earlier yesterday that it was planning to sell it for INR 45bn ($550mn). It said that the rumors were “wrong, baseless and incorrect”.
Vedanta’s dollar bonds were trading stable with its 13.875% bonds due January 2024 currently trading at 91.7.
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