Vedanta Ltd delivered its highest-ever Q1 EBITDA of ₹10,746 crore for this June-end, with margins increasing to 35 per cent; however headline revenue after tax (PAT) dipping 13 per cent year-on-year (y-o-y) to ₹4,457 crore. In keeping with Arun Misra, Govt Director, Vedanta Ltd, deleveraging continues and the primary section of capex throughout ongoing initiatives nearing completion. In an interview to businessline, he talks about, debt-management, commodity pricing pressures, and strategic choices on divestment and growth; aside from coping with the continuing tussle with a US-based short-seller. Excerpts:
Q: Your Q1 PAT is reported at ₹5,000 crore after changes, however the precise PAT stands at ₹4,457 crore, a 13 per cent y-o-y decline. Why the variance?
A: The ₹5,000 crore determine displays our operational PAT, which grew 13 per cent y-o-y. The ₹4,457 crore features a one-time, non-operational cost of ₹757 crore associated to grease and gasoline exploration prices underneath the OALP blocks. These are customary in upstream operations globally — when a block doesn’t yield viable output, the associated fee will get written off. So, the operational enterprise is performing strongly, however accounting norms influence the reported PAT.
Q: Does this exploration write-off sign deeper points in your upstream portfolio?
A: Under no circumstances. The character of the oil and gasoline sector is such that you simply spend money on exploration figuring out some wells gained’t succeed. International friends expertise the identical. We’re actively exploring new blocks and proceed to pump in tech and administration consideration. It’s about constructing for future discoveries — that is a part of the upstream funding cycle.
Q: Your EBITDA margin rose to 35 per cent, however commodity costs have softened. Can these margins be sustained?
A: Regardless of worth pressures, we expanded margins by 81 foundation factors QoQ. This was pushed by price management and premiumisation (higher worth added merchandise). As an illustration, in aluminium, we’re producing extra value-added merchandise, and the price of manufacturing (COP) is at a four-year low. Our zinc enterprise reported its lowest-ever Q1 price of manufacturing of about $1,000 per tonne. Additional price reductions are on, with the corporate tapping in renewable power sources. So sure, we consider margins are sustainable.
Pricing softened each YoY and QoQ. That’s why price administration was essential. Our margin growth in such an setting proves our structural readiness. Worth-added portfolio shifts additionally helped, like shifting from primary metals to wire rods in aluminium.
Q: Vedanta has ₹22,137 crore in money however ₹58,000-plus crore in internet debt. Why haven’t you used extra of the buffer to deleverage?
A: It’s a aware capital technique. We keep flexibility between operational funding, strategic divestments, and refinancing. Money can be used for future progress, not simply deleveraging. Our internet debt-to-EBITDA has already improved from 1.5x to 1.3x, and we intention to convey it nearer to 1x.
Our funding price at Vedanta dropped from 10.5 per cent to 9.2 per cent y-o-y. By higher refinancing, longer maturities, and safer devices, we’ve managed this drop. We count on curiosity price to fall additional, as we refinance upcoming maturities.
Round ₹17,000 crore is due for maturity this fiscal. Most of it’s to safe debt, making refinancing possible. We count on to handle this by means of a mixture of roll-overs and inside accruals. Our companies generate ₹20,000-25,000 crore, so we’re in a robust place.
Money owed are primarily rupee – loans and fewer than 20 per cent are foreign exchange. So fluctuations are additionally underneath management.
Q: You latterly bought a 1.6 per cent stake in Hindustan Zinc. Was this only a liquidity transfer or a part of broader restructuring?
A: It’s a mixture of each. Sale proceeds have been over ₹3,000 crore. There was a acquire of ₹1,944 crore from the sale; and that displays worth unlocked from our earlier investments. On the Vedanta Ltd consolidated books, this acquire doesn’t mirror within the PAT. These strikes are strategic — capital reallocation, deleveraging, and liquidity enhancement. We’ll proceed evaluating such alternatives case by case.
Q: Ought to we count on extra monetisation from different group property?
A: We stay open to such choices. Companies develop; capital constructions evolve. Monetisation choices depend upon valuations, market circumstances, and our financing wants.
Q: You’ve ramped up alumina manufacturing at Lanjigarh. What dangers do you see as you goal 3 million tonnes?
A: Operationally, the ramp-up is progressing effectively, and price of manufacturing is falling. Regulatory scrutiny is all the time on the radar, particularly in Odisha, and we’re totally compliant. We’ve labored intently with stakeholders to make sure alignment with environmental norms.
The aluminium enterprise is on monitor to realize 3.1 mt of alumina and a couple of.8 mt of metallic manufacturing by FY26-FY27.
Home market demand stays a key lever, with 75 per cent of zinc and 65 per cent of aluminium gross sales consumed inside India, limiting the publicity to US tariffs. We count on aluminium CoP to fall beneath $ 1,700/t in H2FY26, aided by greater captive alumina share and low energy prices.
Alumina price is more likely to decline $ 80-100/t over the following two quarters, pushed by elevated output from Lanjigarh; with 60 per cent of the associated fee discount coming from an elevated captive combine, whereas the remaining 40per cent will likely be on account of softer market alumina costs.
Q: Vedanta added 950 MW of service provider energy, taking complete capability to three.83 GW. What’s the technique right here?
A: The service provider energy addition helps our 2X imaginative and prescient, from metals to supplies to power. Energy demand is rising, and pricing is popping beneficial. We see service provider capability as an earnings lever and a hedge in opposition to commodity cycles. Energy realisations at Meenakshi and Athena are anticipated to remain robust at ₹5-5.7/unit, supported by PPAs.
Q: Will Vedanta India spend money on Konkola Copper Mines?
A: No, there are not any funding plans by Vedanta India in KCM. It stays a group-level asset. Our focus there may be on stabilising operations and enhancing volumes.
Q: What’s the outlook for Balco’s profitability and any plans to amass the remaining stake?
A: Balco is performing effectively. It contributes considerably to aluminium margins, which have improved from 27per cent to over 30 per cent. There’s no present proposal to amass extra stake in Balco.
Q: Lastly, with capex necessities rising, how do you stability dividend payouts?
A: We’ve declared ₹7/share as interim dividend whereas pursuing giant capex plans. That reveals our confidence in money flows. Dividend is a precedence—however so is progress. We’re balancing each.
Q: Quick-seller Viceroy Analysis has been important of Vedanta. Is it worrying?
A: We’re a conglomerate with excessive worldwide publicity. There are a number of layers of worldwide company scrutiny that the corporate goes by means of.
I consider, traders have already reposed religion within the firm and its funds. There isn’t a lot we have to do besides give attention to progress and go on the advantages to traders. So, even when a selected establishment could have their opinion. So it does probably not require any fire-fighting or knee-jerk response from our finish.
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