Vedanta to pay Rs 117.1 billion in dividends as Q4 profit drops

Vedanta Ltd. will pay 117.1 billion rupees ($1.5 billion) in dividends to shareholders even as its quarterly profit fell for the first time in six quarters due to elevated raw material costs.

Vedanta will pay a dividend of 31.50 rupees a share to investors, it said in an exchange filing Thursday. Meanwhile, group net income dropped nearly 10% from a year earlier to 58 billion rupees in the January to March period, billionaire Anil Agarwal’s company said. 

That would be the first year-on-year decline in earnings since the quarter ended September 2020. It also missed analysts’ estimate of 62.4 billion rupees.

Sales advanced 41% to 393.4 billion rupees, while expenses rose nearly 33%, with material and power costs rising more than 50% year-on-year. 

Industries across the world have been grappling with higher energy and commodity costs that have been exacerbated by Russia’s war in Ukraine as supply chains get upended. Locally, Indian mills are finding it difficult to secure thermal coal supplies, especially aluminum producers, as the government diverts the fuel to the power sector.

Vedanta’s aluminum output rose 8% from a year earlier during the quarter, and steel output increased by 3%, while oil and gas production fell 7% and power sales declined 16%. Unit Hindustan Zinc Ltd. last week reported an 18% year-on-year growth in quarterly profit but missed estimates.

Shares of Vedanta fell 0.2% in Mumbai on Thursday before the earnings were published, paring the year’s gains to 21%. Analysts have 13 buy recommendations on the company, 3 holds and 2 sells, according to data compiled by Bloomberg.