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Dear Stakeholders,
I am happy to take this opportunity to share my thoughts and express gratitude for your continued trust in Vedanta. Our journey of growth and shared value creation continued unabated during FY 2023 despite market volatility. We owe this success to our team whose agility in pursuing opportunities, thought leadership and decisive action brought us closer to achieving our ambitious goals.
We are pleased to have meaningfully addressed the needs of our stakeholders and communities while assuming a leadership position in tackling environmental issues. Our ESG strategy, ‘Transforming for Good’ has been instrumental in achieving this objective. We are now evolving this further with a more comprehensive approach of ‘Transforming Together’, to create a greater positive impact on our stakeholders and society at large. We are excited about the future and are progressing with greater energy and enthusiasm to create value for all.
India gains global prominence
FY 2023 has been an incredible year for India. The country outperformed and repositioned itself amongst the world’s fastest-growing economies, even as most developed nations faced slower growth amidst high inflation. It posted an impressive 6.8% GDP growth in FY 2023, after delivering 9.1% growth in the previous fiscal year. It is indeed encouraging to witness this growth story unfold with a visible supply chain shift in India’s favour and its manufacturing prowess getting due recognition globally.
India’s improved outlook in many ways is attributable to the government’s quest for self-reliance in manufacturing, minerals and resources. Its importance was accentuated in the aftermath of the pandemic and the Russia-Ukraine conflict, which saw heightened uncertainties and geopolitical tensions globally. Several countries have found themselves precariously positioned, given their dependence on others for key resources. Reassessment of supply chain strategies globally was thus inevitable. Already “China Plus One" policy is gathering momentum as companies and countries seek to diversify their reliance beyond China to other destinations.
India finds itself in an advantageous position, particularly in creating a resilient supply chain and indigenous manufacturing. Energy security and world-class infrastructure will be key to the success of this journey. This trinity of manufacturing, infrastructure and energy along with a focus on digitalisation can continue to propel India's economic growth, unlock new business opportunities and create jobs. It is expected that India's GDP will double to US$7.5 trillion during 2022-2031 with a substantial rise in the contribution from manufacturing.
The Union Budget 2023 also seems to have hit the right notes by prioritising green and digital economies and infrastructure creation through increased capital expenditure allocations. It further focusses on giving a boost to MSMEs with a revamped credit scheme.
The Indian economy remains on a strong footing, with unprecedented levels of optimism and multiple advantageous factors at play. The determined implementation of various positive policies and programmes will drive India’s exceptional growth story for years to come.
Vedanta for a self-reliant India
As India’s largest diversified natural resources company and one of the largest corporations globally with businesses spanning metals, mining and energy, Vedanta has a distinct advantage in India’s journey of self-reliance. Our mining expertise powered by best-in-class technology and talented people along with a robust value-added portfolio positions us attractively to harness the evolving growth opportunity.
We envisage a greater role for us in the nation’s growth story and in making India self-reliant for minerals and energy - an imperative given the growing population and rising industrial activity. Vedanta is already expanding its aluminium and zinc capacities. Our oil and gas operations, which account for nearly one-quarter of India's production, is also diversifying its reserves and resources portfolio towards a vision of contributing 50% to India’s total Oil and Gas production. We have already invested US$1.2 billion in the form of growth capex in FY 2023 to augment our assets and production. We envisage committing another US$1.7 billion in FY 2024 towards growth projects.
Delivering all-round performance
This year, we operated against a difficult and uncertain macro-environment, driven by prolonged geo-political conflict, subsequent energy crisis and aggressive monetary policies adopted by central banks. Our teams delivered excellent operating performance despite the challenges posed by uncertain commodities markets and supply chain realignments. We reported a strong set of financial results, ₹ 1,45,404 crore in revenue and ₹ 35,241 crore in EBITDA. We have generated a healthy net-free cash flow of ₹ 18,077 crore. This all-round performance is a testament to our outstanding portfolio and accomplished leadership team.
Vedanta is committed to growing responsibly, by ensuring that the communities in which we operate, thrive and grow with us. Our flagship programme ‘Nand Ghar’ has been working extensively to strengthen the Aanganwadi ecosystem in India and bridge the urban-rural gap with best-in-class services. We now have Nand Ghars across 14 states which have collectively uplifted 3.2 lakhs women and children through education, nutrition and healthcare.
In continuation of our ‘net zero’ journey, we have signed renewable energy power delivery agreements (PDAs) under the Group’s captive policy during FY 2023. We have also moved a step closer towards realising our philosophy of “zero harm, zero waste, zero discharge” with three more of our business sites being declared water positive.
Our ESG efforts have led to significant improvements in our position across key external ratings platforms, like Dow Jones Sustainability Indexes, Sustainalytics, MSCI and CDP. Vedanta is now ranked #6 among the top 10 diversified metal and mining peers on the Dow Jones Sustainability Index. Further, Vedanta and its various group companies received multiple awards in finance, operational excellence, CSR and HR categories across various recognised platforms.
We reported a strong set of financial results, ₹ 1,45,404 crore in revenue and ₹ 35,241 crore in EBITDA. We have generated a healthy net-free cash flow of ₹ 18,077 crore. This all-round performance is a testament to our outstanding portfolio and accomplished leadership team.
Expanding Nand Ghar footprint
Vedanta is now ranked #6 among the top 10 diversified metal and mining peers on the Dow Jones Sustainability Index. Further, Vedanta and its various group companies received multiple awards in finance, operational excellence, CSR and HR categories across various recognised platforms.
Ensuring sustainable operations
Quest to transform and grow together
Vedanta stands for the highest standards of excellence and integrity and strives to achieve sustainable and responsible growth together with all stakeholders. Our new theme, ‘Transforming Together’, embodies this commitment by fostering collective actions to achieve inclusive, responsible and value-accretive growth. These efforts will be underpinned by environmental stewardship, social equity and impact, besides good governance to deliver tangible benefits to all stakeholders.
Inclusive
It is our continuous endeavour to drive a more resource and minerals-secure world but with the utmost consideration for our people, stakeholders and communities at large.
We believe people are our greatest assets. Through our industry-leading, globally-benchmarked people practices, we promote a work culture that fosters an ecosystem of trust, high performance and inclusivity, with safety being a top priority. Diversity is an area where Vedanta has performed exceptionally with efforts around enhancing women’s representation at higher levels including CXO positions, attracting talent from all regions and promoting an LGBTQ+ friendly workplace. Our efforts towards employees’ well-being have earned us Great Place to Work® accreditation and the esteemed Kincentric Best Employer Award – India 2022.
We are making significant progress in our mission to combat malnutrition and achieve zero hunger. This year, Nand Ghar reached the 4,500 mark across 14 states. We also reached out to people, globally, to join us in the Run for Zero Hunger movement with the Vedanta Delhi Half Marathon and Vedanta Pink City Half Marathon. Hundreds of thousands of people joined us in this movement, and we pledged 2 million meals for a healthy and nourished India. In the International Year of Millets and in line with Poshan 2.0 initiative, Nand Ghar also launched a multi-millet nutribar for the holistic nourishment of every child
We continue to positively transform the lives of our communities through targeted social impact interventions. I am happy to share that this year, we were able to touch the lives of 44 million community members across India and abroad.
Responsible
Climate change is a defining challenge in the current era. Vedanta seeks to address this. We have set ambitious goals, aligned with UN’s Sustainable Development Goals, for environmental stewardship through decarbonisation, circular economy and water positivity. We are also working in partnership with trade bodies and governments to ensure all stakeholders push towards these goals.
In FY 2023, substantial progress was made towards net carbon neutrality. In a pioneering effort, we became the first corporate in South Asia to join the World Economic Forum’s 1 trillion trees movement with a pledge to plant 7 million trees by 2030. We are taking steady steps to achieve 2.5 GW round-the-clock renewable energy (RE RTC) targeted capacity by 2030. We have also rolled out a unique industry-leading EV policy to incentivise employees to switch to EVs and are well on track towards decarbonising 100% of our light motor vehicles fleet by 2030.
Value-accretive
Vedanta’s strategic investments and prudent financial management strategy are to ensure long-term sustainable growth and consistent shareholders’ returns. With this strategic objective, we are investing in various projects for volume growth, backward integration and value-added products, as well as advancing digitalisation at pace.
The Company’s healthy performance and progress in growth projects, helped us declare a total of ₹ 37,730 crore as dividend in FY 2023 in alignment with our capital allocation policy. This translated into a dividend yield of 30%, one of the best among peers.
We have an impeccable track record of honouring all capital market commitments. Vedanta Resources, which is the holding company of Vedanta Limited, has deleveraged by US$2 billion during FY 2023 against its commitment of US$4 billion deleveraging over three years.
Good governance
We place great importance on good governance practices with stringent policies and frameworks for implementation. In recognition of its governance practices, Vedanta was bestowed with the prestigious ‘Golden Peacock Global Award for Excellence in Corporate Governance 2022’.
We are committed to raising the bar continually in this area. We have taken proactive steps to enhance our disclosure practices by voluntarily publishing the Annual Sustainability Report and the Tax Transparency Report and adopting the Integrated Reporting Practice. Demonstrating our dedication to climate matters, we have published our second Task Force on Climate-related Financial Disclosures (TCFD) report this year, while our Aluminium business released its inaugural TCFD report.
Uplifting community through Skill Training
We expect vast opportunities to unfold in the coming years. Our focus is on consolidating our leadership position and unlocking value through growth project execution, scaling innovation and digitalisation and progressing on ESG targets.
Exciting times ahead
We are optimistic about an exciting journey ahead. The macroeconomic factors and risks faced by advanced economies going into recession may pose potential challenges to metal demand. Yet the overall sentiment towards mined commodities is improving as the pace of energy transition accelerates across the globe. Even in the macro backdrop, some green shoots are already visible with inflationary pressures beginning to ease and supply chain constraints showing signs of relenting. This will help to improve profitability and generate robust cash flows.
The demand side remains buoyant with the re-opening of China and the global trend towards a green economy and digital economy. India’s focus on electric mobility, renewable energy and infrastructure creation is expected to drive domestic minerals demand and attract global investments.
We expect vast opportunities to unfold in the coming years. Our focus is on consolidating our leadership position and unlocking value through growth project execution, scaling innovation and digitalisation and progressing on ESG targets. We also remain committed to improving our financial profile and continue to make disciplined capital allocation decisions. On this positive note, I thank all our stakeholders for believing in our growth story. We seek your continued support in our efforts to create value for all and continue to be a partner in and contribute to India’s remarkable economic rise.
Best regards,
Anil AgarwalChairman
