Earnings call transcript: Vedanta Ltd achieves record Q1 EBITDA in 2025

Vedanta Ltd reported its highest-ever Q1 EBITDA of ₹10,007.46 crores, marking a 5% year-over-year increase. The company’s revenue grew by 6% YoY to ₹37,004 crores, with an adjusted PAT increase of 13% YoY to ₹5,000 crores. The EBITDA margin expanded to 35%, the highest in 13 quarters, while net debt reduced to ₹58,002.20 crores. According to InvestingPro analysis, Vedanta maintains a "GREAT" financial health score of 3.08, and the stock appears undervalued based on Fair Value calculations. The company’s stock remained steady, closing at ₹16.5, unchanged from previous levels.

Key Takeaways

• Vedanta Ltd achieved its highest Q1 EBITDA, showing a 5% YoY increase.
• Revenue rose by 6% YoY, indicating strong operational performance.
• The company reduced its net debt and improved its net debt to EBITDA ratio.
• Record production levels in aluminum and zinc were noted.
• The stock price remained stable post-earnings, reflecting steady investor sentiment.

Company Performance

Vedanta Ltd demonstrated robust performance in Q1 2025, achieving record EBITDA and revenue growth. The company capitalized on strong domestic demand and operational efficiencies, particularly in its aluminum and zinc segments. Despite global commodity price volatility, Vedanta maintained a strong market position with a focus on expanding its critical minerals portfolio.

Financial Highlights

• Revenue: ₹37,004 crores, up 6% YoY
• EBITDA: ₹10,007.46 crores, up 5% YoY
• EBITDA Margin: 35%, highest in 13 quarters
• Adjusted PAT: ₹5,000 crores, up 13% YoY
• Net Debt: ₹58,002.20 crores, with an improved net debt to EBITDA ratio of 1.3x

Outlook & Guidance

Vedanta is targeting aluminum production of 3-3.1 million tons for FY26 and aims to expand zinc production to 2 million tons. The company is also enhancing its power capacity and expects oil & gas production to reach 95-100,000 barrels per day. Vedanta is focused on reducing leverage to one times by the fiscal year-end.

Executive Commentary

Deshmin Ayodu, Group CEO, stated, "Despite the uncertain macro environment, our first quarter performance has set us intact to achieve our FY ’26 guidance." He emphasized the company’s commitment to creating sustainable long-term value and expressed confidence in delivering strong performance at current commodity prices.

Risks and Challenges

• Global commodity price volatility could impact revenue.
• Supply chain disruptions may affect production targets.
• Regulatory changes in mining and environmental policies could pose challenges.
• Currency fluctuations could influence financial results.
• Increasing competition in the domestic market might pressure margins.

Vedanta Ltd’s Q1 2025 results highlight its strong operational capabilities and strategic focus on growth and efficiency. With an attractive dividend yield of 9.09% and an Altman Z-Score of 3.72 indicating strong financial health, the company’s ability to sustain performance amidst global challenges positions it well for future success. For detailed analysis and comprehensive valuation metrics, explore Vedanta’s full financial profile on InvestingPro, which includes an extensive Pro Research Report covering what really matters for informed investment decisions.

Full transcript - Vedanta Ltd (VEDL) Q1 2026:

Conference Operator: Ladies and gentlemen, good day, and welcome to the Vedanta Limited Q1 First Quarter Financial Year twenty five-twenty six Earnings Conference Call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. Participants connected on the webcast link may change the quality settings to ten eighty p to watch the proceedings on the best quality. I now hand the conference over to Mr.

Taranit Singh, Group Head, Investor Relations, Vedanta. Thank you, and over to you, sir.

Taranit Singh, Group Head, Investor Relations, Vedanta Limited: Thank you, Sagar. Good evening, everyone, and welcome to Vedanta Limited Q1 FY ’twenty six earnings call. On behalf of team Vedanta, I thank you all for joining us today. I hope you had the chance to look at the press release, earnings presentation and detailed financial statements uploaded on the website of stock exchanges and the company website. On this call, I have with me our group’s CEO, Ms.

Deshmin Ayodu Mr. Arun Mishra, our executive director Mr. Ajay Goel, our CFO Mister Rajee Sumar, CEO, aluminum business Mister Anup Agarwal, CFO, aluminum business and Mister Etech West, CFO, oil and gas business. We will begin with an operational and strategic update by mister Naidu, followed by financial highlights by mister. Thereafter, we will open the lines for q and a.

The call is covered by the cautionary statement provided in the results presentation. With this, I now hand over the call to miss Naidu. Over to you, Deshnee.

Deshmin Ayodu, Group CEO, Vedanta Limited: Thank you so much, Sarandeep. Good evening, everyone. It is a pleasure to address you all as we mark the close of the first quarter FY twenty six. We began the financial year and with global uncertainty resulting from the implementation of The US announced tariff. Early April, we witnessed a sharp decline in the prices of key commodities, particularly the one relevant to us, aluminum, zinc, iron and steel, and oil and gas.

Despite this backdrop, we delivered our strongest first quarter performance ever, setting a strong foundation for the year. During our last interaction in April, I spoke about a new chapter in Vedanta’s journey, Vedanta two point o, a forward looking value driven road map designed to reinforce our leadership across critical minerals, energy, and technology while ensuring sustainable long term growth for all stakeholders. This progress made on this front includes the NCLT initiated hearing on the second motion petition for demerger. The NCLT bench held their first hearing on July 2. Given the paucity of time, the process did not be completed, and the next hearing is scheduled for August 20.

This will take us a step closer to the final order. Augmentation of our strategic investment plan. In the first quarter, Hindustan Zinc Board approved the first phase of its expansion towards 2,000,000 tons capacity. This phase will add 250,000 tons of capacity and is backed by a $1,400,000,000 investment, thereby announcing our total capacity or total capital investment plan from 9 and a half billion dollars to $11,000,000,000, of which $5,900,000,000 has already been spent as at June 2025. We secured two additional mining blocks of high value critical minerals, thereby taking the total count of blocks assigned to 10 since the launch of India’s critical minerals mission.

These blocks are for nickel, chromium, cobalt, vanadium, manganese, tungsten, gold, and rare earth elements. Now we know that this journey on the Vedanta two point o road map isn’t going to be without the challenges. But given our robust business model, strong governance framework, and transparent disclosures, we see ourselves well positioned to address any challenges that may come our way. Being a listed company, we are always open to market scrutiny. However, it is also our responsibility to call out any false narrative targeting us, guided by vested interest, such as the recent malicious propaganda by short seller with an ulterior motive of profit booking at the cost of our long term investors.

I appreciate the wisdom of our key stakeholders who despite the repeated attempts from the short seller to create panic among them, have remained unswayed. As you might be aware, we sought legal advice on the matter from the ex chief justice of India, and his opinion is now shared publicly. Now turning to our operational performance for the quarter. Uganda has posted a robust performance despite a softer pricing environment. Revenue and EBITDA grew by 56% year on year, driven by stronger domestic demand.

The EBITDA margin expanded by 81 basis points year on year to 35%, the highest in the last thirteen quarters. Growth improved to 25%, up 87 basis points year on year, enabled by record volume across two segments and improved margins given the rigorous cost discipline. Let me now walk you through the various business segments. Starting with our aluminum, we achieved a record quarterly alumina production of 587,000 tons, up 9% year on year, demonstrating progress towards delivering a guided volume of over 3,000,000 tons in the current financial year. Our metal production reached 605,000 tons, and we recorded the lowest cost metal cost ex alumina in the last sixteen quarters at $888 per ton.

This is driven by the lowest ever power cost at $491 per ton, supported by a record PLF of 89% at our captive facilities. These costs are sustainable over the coming quarters, except quarter two given the planned maintenance of power generation facilities during the quarter. Our Zinc India operations delivered its highest ever quarter mined metal production of 265,000 tons and the lowest ever first quarter cost at $1,010 per ton. The share of value added product reached 24%, demonstrating progress towards our strategic value added plan. Shifting focus to our international operations, Big International delivered a strong performance at Hamptah’s production surge 74% year on year, backed by strong oil availability and mining ramp up.

Our oil and gas business faced a natural decline in the NDA field. However, this was partially offset by the inflow wells in Ashwarrior, ABH, and satellite fields, particularly in the last two months of the quarter. Over the quarter, we reported an average daily volume of 92,000 of 92,000 barrels per day and managed to reduce the OpEx by 11% quarter on quarter to optimize polymer and chemical use. Our power business recorded a robust 30.8% quarter on quarter volume growth supported by the start of the 300 megawatt capacity at Minaxi Power Plant and 90% availability at KSL. In iron ore, we scaled up volumes at our Karnataka mine to the highest ever 1.7 West metric tons, while our value added business in Goa delivered its highest ever first quarter pig iron production of 213,000 tons.

Operational enhancements like the new PCI mode and the coke drying system are setting us up for sustained efficiency. At ESL, we saw a marginal drop in production due to the punishment, which was offset by the increase in our iron output to point 9,000,000 tons. Margins at mines are strong, improving by 11% quarter on quarter to $49 per ton. Finally, our Sasol business delivered an exceptional growth with all production rising by 66% quarter on quarter and ferrochrome output by a 150 quarter on quarter for the restart of the second furnace. At Kibanto, we are proud of delivering responsible growth with focus on all our stakeholders.

In the first quarter, we reported zero workplace fatalities. We are making steady progress towards our climate goals and have already signed a total renewable power delivery agreement of 1,900 megawatts. During the quarter, we impacted just over 2,000,000 lives through initiatives in maternal health, nutrition, education, and skilling. Our flagship NAMDA program with over 8,600 centers across India is now transforming the lives of over 600,000 people. Looking ahead, our volume growth and margin expansion stories will continue across all processes.

In aluminum, the commissioning of Landiva Train two and the 435,000 tonnes per annum Falco smelter is targeted in the current quarter. The average alumina cost per tonne is likely to decline further, reflection of our lower market prices and increased share of captive production. At Hindustan Zinc, we are targeting the commissioning of a 160,000 tonne per annum roaster at the Bali and in the current quarter, thereby making us ready for the 1.2 plus million tonnes per annum refined metal production. I think international business is on course to complete a complex phase two project in the second half of the current financial year, thereby increasing operational mine capacity of Benton International to 525,000 tons per annum. In oil and gas, the current quarter is going to be action driven.

We are set to begin ASP injection, commence drilling on the West Coast, and launch exploration in the unconventional block. Additionally, we are evaluating drilling plans for deepwater exploration in KG Basin. Our power business is set to add another 1,300 megawatts of new capacity in the second quarter. In July, we commissioned the 350 megawatts at Neenakshi, that’s Unit 3, and the 600 megawatts at Athena, Unit 1. An additional 315 megawatts at Neenakshi, Unit 4, is planned for commissioning in August, while Athena, Unit Two, with a capacity of 600 megawatts, is scheduled for commissioning in quarter four in the current financial year.

I would like to conclude by stating that despite the uncertain macro environment, our first quarter performance has set us intact to achieve our FY ’twenty six guidance. At current commodity prices, we are well positioned to deliver our best performance. We are confident of creating sustainable long term value for all stakeholders while progressing our journey on the Vedanta two point o roadmap. Thank you, Ajay. Thank you, Deshun,

Taranit Singh, Group Head, Investor Relations, Vedanta Limited: and good evening, everyone. The new fiscal has commenced amidst a complex and evolving macroeconomic environment. The first quarter was defined by continued commodity price volatility and a recalibrating global landscape driven by evolving trade dynamics and geopolitical realignment. LME prices remain subdued with most key commodities barring silver witnessing y o y decline. Despite these headwinds, I’m pleased to report that we have delivered our highest ever first quarter EBITDA of rupees $10,007.46 crores along with an 81 basis point Y o Y improvement in margins.

This robust performance reflects the strength of our portfolio and was enabled by rigorous cost reductions through operation efficiencies, stronger market premiums supported by healthy domestic demand, and net favorable ForEx and other strategic levers. Our key businesses continued to demonstrate exceptional margin resilience. Aluminum at 2% and came at 55%. Hindustan Zinc achieved its lowest ever first quarter cost of production, while aluminum reduced its spot metal cost down by 12% quarter on quarter, both remarkable operational milestones. Financial performance highlights.

Let me now walk you through our q one financial results, which reflect the strength and consistency of our operation. Control revenue at $37,004.00 4 growth, registering a solid 6% growth Y o Y. EBITDA came in at least ten thousand seven forty four, our highest ever for the first quarter, marking a 5% increase Y o Y. EBITDA margin expanded to 35%, the highest in the past thirteen quarters, a clear indicator of operational excellence and cost discipline. Adjusted PAT rose to rupees 5,000 crores, a strong 13% growth Y o Y, while reported PAT stood at 4,457 crores after factoring in certain one off items.

ROCE improved by 87 basis points Y o Y to 25%, sustaining our double digit growth profile and reinforcing our focus on capital efficiency. With this strong start up of the current year, we are well positioned to sustain momentum as we execute our strategic priorities. Now turning to the balance sheet, we continue to operate with a position of strength and discipline. So as of June 2025, our net debt stood at $58,002.20 q, representing a decline of rupees 3,100 crores y o y, supported by strong internal approvals and targeted transactions. The net debt to EBITDA ratio improved to 1.3 from 1.5 x last year, reflecting improved cash flow generation and capital management efficiency.

We ended the quarter with a healthy liquidity of $30,001.03 7 crores, a 33% Y o Y and 7% quarter on quarter increase, providing us with ample headroom for investment and contingencies. Now finally staying true to our shareholder commitment, we declared a dividend of rupee 7 per share during the quarter. Moving on to capital actions and deleveraging. In line with our capital discipline agenda, we took several initiatives in the quarter, further strengthening our capital structure. We monetized 1.6% stake in Uztan Zinc, raising more than rupees 3,000 crores in q one.

We also raised rupees 5,000 c r via entities and other loans at more favorable terms, a testament to the market’s confidence in our fixed income. These initiatives has contributed to a one thirty basis point improvement Y o Y in our borrowing costs, now reduced down to 9.2%. Together, these actions enhance financial agility, further our journey towards a leaner capital structure. Demerger update. Let me now update you on the progress of demerger.

This is though briefly covered that. The second motion petition has been formally submitted to MCLT, and the next hearing is scheduled on twentieth August after part hearing on second July. Separately, the NCLT has granted an increased fee on CSPL, our power demerger order by NCLT, with the next hearing scheduled on fourth August. We remain confident of the positive outcome in both forums, and we continue to progress in line with our previously shared timelines. The execution of the demerger remains a top priority for Vedanta.

On credit ratings, both Crystal and Nikra have reaffirmed Vedanta’s ratings at double a, reflecting strong institutional confidence in our governance practices, financial strength, and the long term strategic outlook. In conclusion, the sum of q one has been a quarter of strength, discipline, and strategic delivery. We delivered a record first quarter EBITDA, executed critical capital and deleveraging actions, sustained robust margins in the two businesses, announced much anticipated two x growth project for Zinc India. And in July, we commissioned nine fifty megawatt of merchant power facility at Meenakshi and Athena. Both of which are now fully operational.

As we look ahead, we continue to operate with clarity and conviction, undeterred by action attempt to shift the narrative. Together, we are building a stronger security with Vedanta. Vedanta2.com. Thank you. Now over to operator for Q and A.

Conference Operator: Thank you very much. We will now begin the question and answer session. Our first question comes from the line of Amit Lahodi from MK Global. Please go ahead.

Taranit Singh, Group Head, Investor Relations, Vedanta Limited: Thanks for the opportunity. My first question is on aluminum hot metal cost, which has declined in q one. So what are the driver views in terms of power and other stuff? And can we expect more savings in coming quarters? Thank you.

Thank you, Amit.

Deshmin Ayodu, Group CEO, Vedanta Limited: I will start and then hand over to Anup. So we delivered, as you mentioned, a COP of $17.65 dollars per ton in quarter one, and that was a reduction of $247 per ton. So that’s a 12% quarter on quarter. This is largely on account of the softened aluminum market prices as well as the increase in captive mix as we indicated with the land regarding fees volume. So in quarter two, we’d like you to see a a marginal cost reduction that have also indicated.

You know, although we have better reception of the lower aluminum prices, it will be balanced by higher power cost due to the planned maintenance activities we have at our power plants in Jakobaba in particular. In the second half of the year, we do expect cost to be around the lower end of the already guided range. I’ll hand over to you, Anoop, to talk about some of the specifics we are doing in terms of cost reduction and containment cost and.

Taranit Singh, Group Head, Investor Relations, Vedanta Limited: Thank you, Jisi. And, Amit, people see, know, in h two with the the train to land use is coming through. They will have improved the. So so that will take us our mix which is at relatively 50 to somewhere around 65 to 70%, point number one. Point number two, you have seen last few quarters, the work that has happened on the power and the coal price.

And if you covered it, but for some plan maintenance, which was the by design plan to set up for the s two, we are now close below $500. So with the improved longevity, the alumina cost below 800, the power cost somewhere around 500, you can see we are now set for the hot metal cost sub 1,700 as we go into the. And you will recall in our guidance also, in the year beginning, we had said that the hot metal cost for the year will be in the range of 1,700 to $17.50. Q one, we have done closer to $17.55. Quarter two, this is already included that because of the client’s account, we will be slightly higher or margins are flattish.

But but for the s two, we expect a very, very strong cost. And we will look at the LME today, and given the anything that we are having, you can see that today, the delivery probably will have a margin of $1,100 or two as we go into the. Swamy, hopefully, have answered your question. Thank you. Yes.

So just to follow-up on this specifically for alumina cost, as you mentioned in your opening the market well, could you quantify cost reduction that could come one from lower alumina prices and second cost reduction at Lanjigarh because it has gone up in the recent quarters to $3.73 $80? So can we see some reduction there as well at Lanjigarh? I’ll I’ll ask you. So we didn’t see, you know, next two quarters, we expect a cost reduction of closure to 80 to $100. And you can assume that 60% of it is going to come through the captive alumina bauxite, and the balance is, of course, going to come from the market value.

Okay. And lastly, if you could provide commissioning time lines for Cigimali bauxite mine as well as the coal mines.

Deshmin Ayodu, Group CEO, Vedanta Limited: Thank you, Amit. Maybe I will start and then hand over to Rajiv. So on Cigimali, we are targeting the EC by the end of this of this quarter, which means probably a a start of production at the ’4. In terms of overall bauxite mix, we are still factoring, as we’ve indicated previously, about

Taranit Singh, Group Head, Investor Relations, Vedanta Limited: a million to a million

Deshmin Ayodu, Group CEO, Vedanta Limited: and a half tons of bauxite from Sigimali this year still. I’ll hand over to you, Raghi, to talk more and also the questions around coal mining coming.

Taranit Singh, Group Head, Investor Relations, Vedanta Limited: Thank you, Desi. Thank you, Amit. On Sigimali, we are going to get the s t one clearance at the start, and then followed by e t clearances, followed by s t two clearances. So that’s the process of clearances. The FFT in Delhi happened yesterday, and we have to get the communication in the next few days.

Hopefully, we are going to get the approvals. And then from there, I think, as this meter, the next three to four months, we should be over with all the approvals, and then we can start to go on to the mine. As far as COVID is concerned, to Lloyd, we have an interest in approval for s t one. And just few days back, we got a grant for the e c as well. SD two is also being targeted by the end of the quarter.

And as is the guidance in the last quarter, in quarter three, we should be up and we should be ready to start the. So that’s the guidance and we stick to the guidance. As far as global release concerns, the mining plan has been approved. We thought has been in the context. Few days back, we got 300 acres.

This is about 41% of the government plan. And we are targeting the f c one the fee by the quarter four of this year. I hope I have answered you, Amit, related to the progress of the team of people lawyers. Thanks for your elaborate answer. Appreciate it.

Conference Operator: Thank you. Our next question comes from the line of Ankit Tekmani from FBI General Insurance. Please go ahead.

Taranit Singh, Group Head, Investor Relations, Vedanta Limited: Yeah. Thanks for the opportunity. I just wanted to know whether Nunia and EGA issue is resolved. If not, what is

Deshmin Ayodu, Group CEO, Vedanta Limited: your website? Thank you for that. And because I think I will hand you over to Anup on the question. But if I understood you why you’re asking us about EBA. Right?

So EBA operations in Guinea still stand suspended as there’s no bauxite supplies from EBA in Guinea. I think maybe before I hand over for I look to add anything further, I just want to maybe put the context around, you know, what is happening on from a overall bauxite and alumina point of view for the business. So as we guided, we are targeting three to 3,100,000 tons of alumina production for the year, and you all would have seen that we’ve had a a good start at Nanjigar in terms of 584,000 tons in the first quarter, which actually put us in a very good position to meet that number. So we roughly need just over 9,000,000 tons of bauxite for the year. Around 5,000,000 tons of that is coming from ONC and other domestic sources, two and a half million tons from imports, and as Rajiv has just guided, another one one to one and a half million tons from City Money.

So we are fully tied up for our bauxite commitment for the full year. I think I can leave it there, Anup. That’s it. I don’t have anything to add.

Taranit Singh, Group Head, Investor Relations, Vedanta Limited: Yeah. Thank you. Thank you for this. Yeah.

Deshmin Ayodu, Group CEO, Vedanta Limited: Thank you, Anup.

Conference Operator: Thank you. Our next question comes from the line of Aditya Vellaker from Axis Security. Please go ahead.

Taranit Singh, Group Head, Investor Relations, Vedanta Limited: Sir, our guidance on oil and gas is between 95 to 100 kboepd. And in Q1, we have seen a 17% decline. So in that context, in the earlier call, we have said that we will see the oil and gas volume will have an upward trajectory from q two onwards. So are we on track for that? And given our efforts on exploration side, so if you can throw some guidance for in the medium term, so how those volumes will ramp up and how we will address the decline.

So that’s number one.

Deshmin Ayodu, Group CEO, Vedanta Limited: Thank you, Aditya. I will start and then hand over to Hitesh, our CFO from Kane is on the line. So as you’re right, you said FY ’26, we are targeting a range of 95 to a 100,000 barrels of oil equivalent per day. And just to remind everyone that we we came very close to the guidance of last So there’s maybe three things I wanna mention before I hand over to Itay to talk about the specifics.

But we want to manage the decline by about 15% from f y twenty five levels. There are three areas that we are targeting. New wells that we drilled in f y twenty five will give us about 8,000 barrels of oil equivalent per day. There’s additional wells planned for this year that are already starting to, you know, to give us an uplift in in barrels, and that’s about 5,000 barrels of oil equivalent per day. In addition, and I really want Itesh to talk a lot about the ASP project.

So we’ve been talking about ASP. We are now we have started ASP injection in the cluster well well pad in Mangla, and that’s now targeted for August and September. So three things are happening. This is a decline that we’ve planned for. We have wells from last year that are giving us the delta of about 8,000.

We have wells being drilled this year, 5,000, and we have our ASC project. So maybe, Jess, you can talk a little bit about the specifics as well as then answer the questions around further exploration and development projects that we are busy with. Yeah.

Taranit Singh, Group Head, Investor Relations, Vedanta Limited: Thanks, Jason. So I think, you know, you know, in terms of production, as Jason said, you know, we delivered 93,000 barrels per day for q one. And if you look at over the last six months, we have managed to continue a decline. Rates are now around 3% to 4% quarter on quarter. One of the or a couple of two activities which have added in helping us to manage decline is Now ASP project, we are set for injection in selective and tagging in the minor fee.

So in couple of months, we will start injecting volume on those fees. In in around the six months time, we expect volume gain. And and and once, you know, we are through with the full field injection, probably in three to four quarters, we expect the additional gain of around 15,000 barrels per day from, you know, ASP injection in select. Now beyond, you know, ASP, you know, looking into the future as well, especially from one point of view, we are also starting appraisal and development of the SAP, which is obviously, which is on the best course. Now the link in that team will start in October this year, and that is going to add around $18,000 of oil equivalent in around around one and a half years time.

Now what we can also be able to achieve this year is still, you know, our on our OpEx, which is going to be around fifteen to fifteen dollars per barrel. Looking at at at long term and especially on the exploration side, what we have started currently is doing in Rajasthan, which has been our most prolific team. So we are working on international rate targeting deeper prospect, tighter prospect, and we intend to drill three to six to eight. So I have already spiked couple of these there. In the West Coast, we also have a OLT block where we just spud in September 2025.

So we have been ordered, and and it’s this is the process of being mobilized. In the market, a couple of, you know, quarterback, we had a study with Druzh. So we announced it for appraisal of their discovery. So in the next two months, we’ll we’ll try to find two to three ways to figure out the potential of of Rudra. And we’ll have few more opportunities in the Northeast, which will be around q three, q four of of this year.

And, you know, beyond this in exploration, one of the larger, you know, playing our books is in the G portal where we recently acquired the same data. Now the data has given us some very positive indication on the potential, and we intend to target the wells early next year. So this is on the overall exploration plan. Thank you. And if you have any questions, please.

Yes. Thanks for that detailed explanation. My second question is on power division. So we have seen a good jump in this quarter. And I if I can see for Meenakshi, the power realizations have stood at a very high level of 7.2 rupees per kilowatt hour.

So just wanted to understand on Meenakshi and Athena, what is the split between power purchase agreements and spot merchant sales? Because in q one, we have seen that merchant tariffs have come down in the range of 3 to 4 rupees per kilowatt hour. And in that context, Meenakshi’s realization is quite high. So if you can close some light on that. Yeah.

Deshmin Ayodu, Group CEO, Vedanta Limited: Thank you, Aditya. Maybe just to recap. Right? So, Aditya, on Meenakshi, present, we we have the 350 megawatts. And as we said that we will we’ve added another 350 megawatts.

So we actually by the by the end of this quarter or the end of quarter two, we have the full 1,000 megawatts power there. And then Athena, as you’ve guided, we’ve only commissioned the 600 megawatts. The remaining 600 megawatts will come at the end. So back to maybe performance and your point, quarter one performance, 300 megawatts of capacity was operating, and the average generation cost was around 6 rupees per unit, and selling price was around 7 rupees per unit. So from quarter two onwards, right, Ninashi operating capacity, as I said, a thousand megawatt estimated PLF around 50%.

Cost is 5 rupees per unit, and selling price will be between $5.50 rupees to $5.70 rupees per unit. On a C9 600 megawatt PLF will ramp up from 60% around 80% in the year, and the cost here is about 3.6 rupees per unit, selling price at 5 rupees per unit. So short term PPAs are in place for the power sale.

Taranit Singh, Group Head, Investor Relations, Vedanta Limited: Understood. So any percentage between short term PPA and spot sales for both these plans? It’s it’s all short term PPAs at this moment, and we are trying to stabilize the plans at this point in time. And over a period of time, we will also enter into a long term PPA, which will be followed also by FSA.

Deshmin Ayodu, Group CEO, Vedanta Limited: Understand. You. Yeah. That’s it from my side. Thank you.

Thanks.

Conference Operator: Thank you. Our next question comes from the line of Pallav Agarwal from Antique Stock Broking. Please go ahead.

Taranit Singh, Group Head, Investor Relations, Vedanta Limited: Yeah. Good evening. So my first question was from you. Some of the media reports stating that the Ministry of Petroleum had objections to the demerger. So what are the, you know, any what are the grounds in which, you know, the Ministry of Petroleum had certain objection, if you could specify that.

Deshmin Ayodu, Group CEO, Vedanta Limited: Thank you thank you for that. I think we we firstly, we did get quite a detailed account of where we are in the overall demerger approval with reference to MOPMG. Of course, they are key key stakeholders for us in the in our oil and gas business. And in the last NCLT hearing, they did express concern about the payments of any of the disputed dues that that may become payable by change in case the ongoing arbitration ruling, as as we’ve all learned now, comes in their favor. So we are working with them as we do with all key stakeholders, and we are confident that we will come towards a solution at the earliest possible time.

Taranit Singh, Group Head, Investor Relations, Vedanta Limited: Okay. Also, you know, we had plans for expanding the aluminum capacity, I think, to about 3,100,000 tons, and even the aluminum debottlenecking, if I remember correctly, 6,000,000 tons. So any timelines on that? What part of those projects will be commissioned in FY ’26 and ’27?

Deshmin Ayodu, Group CEO, Vedanta Limited: Yeah. So for now, these are debottlenecking exercises. As you know, the current capacity expansion volume wise will take us to around the 2,800,000 mark. And then in terms of that and then in terms of the overall expansion from five to six six million tons per annum, I’ll let Rajee talk us through it. In terms of when that capacity will likely be brought in line, we are forecasting maybe the back end of FY twenty seven.

So, Rajeev, maybe you just want to add in terms of the work underway to reach those capacities.

Taranit Singh, Group Head, Investor Relations, Vedanta Limited: So thank you, Deshnee. You have summed it up nicely. The the timeline should be eighteen months that we are looking at. It is how do you increase the volume? It is done by improving the current carrying capacity of the parts, and we are looking at the enhanced technology.

It’s called magnetic compensation loop. We are working on that technology to improve the capacity, but it will take about eighteen months. First thing first, we have to achieve whatever we have planned for, and that’s where the focus is to reach to 2,850,000 tons at both the places at Banco as well as in. And then they can take take it on as far as this maintenance are concerned. As far as is concerned, we have a task cut out to reach 5,000,000.

And once the 5,000,000 tons is achieved, then we will look at the the the capacity, which we already have, right, from logistics to evacuation to also talk about both the infrastructure. So it will be a two and two as well as what we are doing in Tanzania is to improve the how to look the assets that we have, and I think that’s the way to go about as far as we are concerned. Thank you

Deshmin Ayodu, Group CEO, Vedanta Limited: for that. Thank you for that, Rajiv. And and, Pallav, just to be clear, you also asked for some of the other project expansions? Yeah. I think some of them For this aluminum?

Yeah.

Taranit Singh, Group Head, Investor Relations, Vedanta Limited: I think some of the, you know, the the mining that you’ve outlined.

Deshmin Ayodu, Group CEO, Vedanta Limited: Alright. And so I think what I will do there is actually ask Arun Nisha to talk about the new fountains and expansion. No.

Taranit Singh, Group Head, Investor Relations, Vedanta Limited: No. I think we are going for a 2,000,000 ton expansion of which as we reported after the last board meeting, 12,000 core board approval that we have announced, which will add a capacity of point two five million tons. And now it will be followed up by further announcement till about September so that we do the entire project approval for 2,000,000 ton metal production. Of course, we did sufficient expansion of the mine, which are currently at 17,000,000 ton ore production to go up to 35,000,000 ton ore production. This is also seen jump in silver production from currently 700 to 800 tons to about 1,500 tons.

Deshmin Ayodu, Group CEO, Vedanta Limited: Thank you. And, of course, we’re also quite excited about the funds for phase two project in Zinichen National, and that project is almost 80% complete. We’re targeting mechanical completion by the December as we previously guided and hoping to ramp up thereafter in the ’26. So that that will add another 4,000,000 tons run of mine, and currently, we’re looking at just under 200,000 tons of zinc MIT every year. Thank you, Carlos.

Taranit Singh, Group Head, Investor Relations, Vedanta Limited: Sure. Yeah. Thank you so And then lastly, could be the potential impact of, you know, The US tariffs on exports from India? What is the level of exposure that we have to The US market?

Deshmin Ayodu, Group CEO, Vedanta Limited: Yeah. Absolutely. I you know, even in the last quarter, right, because in the last quarter, it was just after the after the announcement. And we basically said that, you know, as a business, given our majority commodity exposure in both zinc and aluminum, we’re in a very fortunate business in terms of, you know, more than 75% of our zinc goes into India domestic market and 65% of aluminum goes into domestic market as well. And as it stands, we only have a, you know, a three percent exposure in terms of our aluminum business into into The US.

So we still maintain position of limited exposure even with the with the current amount of 50% steel and aluminum tariffs.

Taranit Singh, Group Head, Investor Relations, Vedanta Limited: Okay. Thank you so much.

Deshmin Ayodu, Group CEO, Vedanta Limited: Thank you, Palak. Thank

Conference Operator: you. Our next question comes from the line of Jatin Damania from Swan Investments. Please go ahead.

Taranit Singh, Group Head, Investor Relations, Vedanta Limited: Good evening, everyone, and thank you for the opportunity. The question is more on the parent side where we have significantly the balance sheet and for this financial year also we started with good note. But coming to our next year where we have a repayment of near about $700,000,000. So just wanted to know regarding the repayment, how are we going to are we going to refinance that loan or probably will be supporting by internal approval something? Right, sir.

And just if I get it clearly, you mean the Vedanta Limited or Vedanta Resources? Vedanta Resources. Okay. So so first, you’re right. I mean, the debt debt for Vedanta Resources over the last many years has been declining.

So deleveraging is our big priority. So from eight point nine three years ago down to four point nine, and as on June 30, it is further down to 4,800,000,000.0. So over the last five quarters, the VRR debt is lower by almost a billion. That journey will continue. And you may have noted the last year during investor call, we announced that VRR will deleverage 3,000,000,000 over the previous.

That’s the commitment that commitment remains on the board. If I keep off the current system for the remainder of nine months, the requirement for loan refinancing that we are is almost $320,000,000 and interest $4.50. Total about $7.70. So through a mix of refinancing and some dividends, which of course remains in both decision, it will be managed. Net net, we are in debt in the current fiscal will go down by half a billion, down to 4.3 odd billion.

Now speaking of the Dantal Limited, which is the operating company, and here, the right metric remains in net debt to EBITDA, more so in a high growth environment. You may have seen our results. Our leverage is better off by two down debt to EBITDA is 1.3 x, vis a vis 1.5 x at the last year same time. At Vedanta India, by the end of the fiscal, our leverage will further improve to one x, where our profitability will be bigger than our debt. So we are in debt target is in value terms, 3,000,000,000 in three years.

Vedanta India, one x leverage by this current fiscal end. Thank you for the detailed answer. Second thing, on the same, you’ve all of the same thing, as you mentioned that internal towards the dividend, which is in the both decision. But if you can throw some light on the branch fee, which condition 3%, I mean, till which year does branch fee will continue or any decision will be taken on this this guarantee for a period of time? Because guarantee is not a new subject, as you know.

It’s it’s 2017. And what I can affirm, as you know, the brand Vedanta and the and the the the name is owned by Vedanta Resources, which has been formally leased to Vedanta Limited and to subsidiaries. And right now, the current arrangement of 3% branch fee is valid till 2029 next four years. So 3% continues, and there is no plan to change the rate in near future. And last one, you can brief on the update on your Saudi project because, like, the settlement of Saudi project and what is the step on that?

Deshmin Ayodu, Group CEO, Vedanta Limited: Thank you for that, Justin. I think, You know, so we’ve received the strategic mineral license for double five wells that’s on the exploration site. And I think that’s quite something I I just wanna give you a quick update maybe on the overall Saudi copper project. The site has an estimated exploration potential of about 25 to 15,000,000 tons at about a 1.3 average copper grade associated with that and about a three gram per ton gold. So we’re quite excited about about the exploration prospects there.

As we’ve indicated, we still aim to invest about 2,000,000,000 in in projects there. The two projects as we’ve discussed previously is the MOU that we signed for the Ministry of Investments and the Ministry of Industry among the resources to set up the 400,000 tons per annum copper smelter as and refinery and the 300,000 tons copper rod project. Happy to report that on the copper rod project, we have identified the land. We have identified the EPC. That is the contractor, and we are going to final approval on the copper smelter and refinery project.

That is a longer term project, and we are still working on the feasibility study. But we will, of course, come and update you in the subsequent quarters. Sure.

Taranit Singh, Group Head, Investor Relations, Vedanta Limited: Thank you, and I’ll be back. Thank you again.

Conference Operator: Thank you. Our next question comes from the line of Vikash Singh from ICICI Securities. Please go ahead. Good evening, and thank

Taranit Singh, Group Head, Investor Relations, Vedanta Limited: you for the opportunity. My first question pertains to slide 20. In the the debt chart, there’s an other debt of 2,958 crores. So can we look at what is exactly this is? So on the bridge, you’re right, Vikash, it is Yeah. Is

a couple of companies. That’s right. So maybe almost $2.70 odd crores is the tedious receivable from a link on the last payout to the Danta Limited. It is only a timing difference. And as we pay our income tax next time, the series will be adjusted.

The significant portion is almost $1,002.50 crores is a bank guarantee that we have given to Enflat as part of our TSPL demerger. So as you as you earlier mentioned, for the power, CSPL demerger, while seeking the state from n plant from n 30 order, the danther on its matter, the the greatest matter, we gave to n plant a bank guarantee. It is a fully cash back. So $1,002.48 rupees is a bank guarantee. And the remainder is a multiple bank guarantees given to the government in terms of paying blocks, which are cash margin back.

So in summary, they have cash in with the dancer in terms of fixed deposits or cash, which has been subject to bank guarantees. As we augment increase our limit for the bank guarantees, this cash will get released. Noted, sir. The second question pertains to Ansta’s stage two project. Our stage one, we promised $2.50 kt kind of the volumes has not come yet despite this project has been taken up for almost more than half a decade back.

We just wanted to know the timeline when we are going to hit the two fifty k p requirement in the phase one. And phase two also entails $400,000,000 kind of the capital cost. I thought that they’re usually phase twos are cheaper in terms of the same capacity addition. So if you could just give us some insight to what’s happening there.

Deshmin Ayodu, Group CEO, Vedanta Limited: Yeah. Thank you for that, Vikash. I think as we’ve previously guided, we have had some challenges with mining, and that’s primarily the reason why we have not been able to achieve both the grade as well as as well as the volume. Happy to note, and if you look at the performance on a quarter on quarter basis, we’re seeing an excess of 50% in pieces now coming out of the concept MIT, which is absolutely the right the right direction for us. So mining is now recovered, and not only has the mining recovered in terms of the waste stripping that we’ve had to do in the open pit, but we’re also getting ready to stockpile for the second plant.

And in terms of your question around the capital guidance, yes, ideally, that should be the case when you’re building the second phase and you’re kind of using a very similar design. But a few fundamental changes, the first thing I mentioned on the waste stripping, we have to capitalize a lot more waste stripping for phase two. So that’s where the mining capital was slightly higher than the phase one capital. Secondly, on the plant, so this is where I think credit to the team on the ground where we saw the opportunity of actually taking a 4,000,000 ton run of mine plan too and actually debottlenecking it to over 10% already whilst in design. And that additional 10% has come with a with an increase in the plant capital cost.

And so that’s why the capital is slightly increased. In addition to that, and in compliance with our GST and standards for tailings, the tailings dam associated phase two does need to be better aligned than the original design from 2022, and that we’ve incurred additional cost on the claims down as well. That’s the reason for the overall, I would say, cost increases, but I’m happy and so should Ajay that all of this is coming with some benefits. And actually, even at, you know, LME of around 2,400, which is what the project was initially guided on, we are seeing an increase on overall IRR. So still a good project.

We’re absolutely backing them to reach to that increase over 500,000 tons in the next two to three quarters. Thank you, Deepak.

Taranit Singh, Group Head, Investor Relations, Vedanta Limited: No, sir. Thank you. That’s all for my time, and all the best for you.

Deshmin Ayodu, Group CEO, Vedanta Limited: Thank you.

Taranit Singh, Group Head, Investor Relations, Vedanta Limited: Thank you.

Conference Operator: Thank you. Our next question comes from the line of Rashi Chopra from Citigroup. Please go ahead.

Ajay Goel, CFO, Vedanta Limited: Thank you. Sorry. I think I just missed some of the detail that you gave about the parent debt. So you said it was 4,800,000,000.0. Could you just help break this up between bonds and bank loan

Taranit Singh, Group Head, Investor Relations, Vedanta Limited: Yes, sir. So out of 4,800,000,000.0, Rashid, the bonds are about 3,100,000,000.0, and the remainder 1.7 are the bank loans. If I look at the maturity schedule, maybe for the current fiscal, so the the the one quarter is behind us, we can look at the second quarter starting July to March next year, next nine months. So that’s the repayment obligations almost $1,320,000,000, and the interest expenses almost $4.30. That makes up $750,000,000 in the remainder of the year.

So the way we explained the it is a mix of both refinancing and also repayment. If you look at we are it has two source of cash. One is the branch fee. So $380,000,000 has been paid in the first year as has been the practice in the past. Secondly, in the current fiscal, our dividend payout is about 1.5%.

Even if we assume a routine dividend of five to 6%, which has been passed for the course in the Indian context, It means $850,000,000 will be dividend, $3.80 or 400 will be the branch fee, 1.25. So mostly through internal efforts, your VRL debt will be managed. That means organic deleveraging of half a billion in the current system. Overall, if you look at slightly midterm picture, what VRL has in the market committed, 3,000,000,000 deleveraging over three years and VEDL being an operating company, our leverage ratio from 1.3 x will improve to one x by the current fiscal.

Ajay Goel, CFO, Vedanta Limited: Got it. And for you, in the first quarter, you will be leveraged by about 200,000,000.

Taranit Singh, Group Head, Investor Relations, Vedanta Limited: That’s correct. By two twenty one million. You’re right.

Ajay Goel, CFO, Vedanta Limited: And if by ’27, what is the payment schedule like?

Taranit Singh, Group Head, Investor Relations, Vedanta Limited: Next year, the principal is about $760,000,000, and the interest cost almost $4.50. So about 1,100,000,000.0. And that is a very interesting question you asked. If you look at last three years, the principal requirement is we are about 2,000,000,000. Interest, $7.50.

Total, 2,700,000,000.0. This is the last year with Amtra Resources where the need for cash is about 1,400,000,000.0. Starting next year, it’s about 1,100,000,000.0. In FY ’twenty, it is sub 1,000,000,000. So going forward, as we have earlier communicated to a contrast to a branch fee, 440,000,000 and even a lower dividend of almost 4% in.

We are in managed to both branch fee as well to interest cost and hence, premium account will be self funded. And by paying 4% dividend, the entire refinancing will be done. So dividend of four percent equals deleveraging. So so in summary, about 1,100,000,000.0 requirement next year and less than 1,000,000,000 the year next.

Ajay Goel, CFO, Vedanta Limited: Understood. Thank you. And is there in the demerger, any delay expected beyond September?

Deshmin Ayodu, Group CEO, Vedanta Limited: I think as we started, I mean, we are very confident that we have the next gearing coming up on the on the twentieth, and we will see after that what happens in terms of the in terms of the timeline. But we remain confident of a favorable outcome in both forum that both Ajay and I have guided and continue to progress, you know, in line with our previously shared timeline. So we’re still targeting our September, October timeline. Thank you, Rajesh.

Ajay Goel, CFO, Vedanta Limited: Thank you.

Conference Operator: Thank you. Ladies and gentlemen, we’ll take that as a last question for today. I now hand the conference over to mister Charendeep Singh for closing comments.

Taranit Singh, Group Head, Investor Relations, Vedanta Limited: Thanks, Rajesh, and thank you, everyone, for taking out the time to join us. I hope your questions have been answered. For any unanswered questions, please feel free to reach out to the IR team. I’ll conclude our call and looking forward to connecting with you in October with q two numbers. So have a wonderful rest of the day.

Goodbye.

Conference Operator: Thank you. On behalf of Vedanta Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.

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