Vedanta Group (Vedanta Ltd, Vedanta Aluminum, Vedanta Iron & Steel, Vedanta Power, Vedanta Oil & Gas) - Q1 FY27 Combined Earnings Call Summary
Thursday, July 30, 2026 5:00 PM IST
Note: Combined call covering all five post-demerger Vedanta entities; Q1 FY27 is the first reporting period post demerger effective 1 May 2026.
Event Participants
Executives
11 Ajay Goel, Anup Agarwal, Arpit Mundra, Arun Misra, Charanjit Singh, Jim Johnny Gast, Navin Jaju, Pankaj Jha, Pankaj Kumar Sharma, Rajesh Kumar, Rajinder Singh Ahuja
Analysts
12 Abhishek Poddar, Akhilesh Kumar, Amit Murarka, Ashish Kejriwal, Indrajit Agarwal, Jashandeep Singh, Pinakin Parekh, Raashi Chopra, Ritesh Shah, Sabri Hazarika, Shubham Jain, Sumangal Nevatia
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Vedanta Ltd (Continuing Ops) | ||
| Revenue | ₹23,456 crores | +51% YoY, first post-demerger quarter |
| EBITDA | ₹8,469 crores | +98% YoY, highest ever; margin 57% (+985 bps YoY) |
| PAT | ₹5,294 crores | vs ₹152 crores YoY, best ever |
| ROCE | 28% | Deliver on profitable growth |
| Q1 Capex | ₹1,148 crores | Group capex while deleveraging ₹2,226 crores |
| Net Debt/EBITDA | 0.3x | Among best in industry; cash ₹19,009 crores |
| Vedanta Aluminium (WAML) | ||
| Revenue | ₹21,005 crores | +45% YoY, +13% QoQ, all-time high |
| EBITDA | ₹10,499 crores | +134% YoY, +24% QoQ, record |
| EBITDA/Ton | $1,804 | vs $1,511 QoQ |
| Hot Metal Cost | $1,698/t | -4% YoY, -3% QoQ; FY27 guidance $1,650–1,700 |
| PAT | ₹6,597 crores | +200% YoY |
| ROCE | 42% | Up from prior quarters |
| Net Debt/EBITDA | 0.9x | vs 1.3x prior; cash ₹6,000+ crores |
| Aluminium Production | 632 kt | +5% YoY, +3% QoQ, all-time high |
| Alumina Production | 826 kt | +41% YoY, -6% QoQ (stabilization issues) |
| VAP Output | 389 kt | +14% YoY, record; billet +18%, alloy +38% QoQ |
| Interim Dividend | ₹8/share | First post-demerger dividend |
| Vedanta Iron & Steel (VISL) | ||
| Revenue | ₹3,662 crores | +18% YoY |
| EBITDA | ₹515 crores | +54% YoY; margin 14% vs 11% YoY |
| Tax (PAT) | ₹121 crores | Positive quarter |
| Steel Saleable Production | 58,280 tons | EBITDA margin 12% |
| Iron Ore Production | 2.6 Mt | +4% YoY; margin +24% YoY |
| Net Debt/EBITDA | 1.3x | Net debt ₹2,733 crores post demerger |
| ROCE | 16% | |
| Vedanta Power | ||
| Revenue | ₹2,607 crores | +31% YoY |
| Sales | 5,224 MU | +38% YoY |
| EBITDA | ₹291 crores | Impacted by Shakti boiler incident; Meenakshi highest ever ₹112 crores |
| PAT (pre-exceptional) | -₹59 crores | One-time exceptional ₹487 crores |
| Cash | ~₹1,130 crores | CP raised at 8.25% |
| Vedanta Oil & Gas | ||
| Revenue | ₹2,507 crores | -3% QoQ (seasonal sales pattern) |
| EBITDA | ₹1,232 crores | +16% QoQ; margin 49% |
| Unit Operating Cost | $17.4/bbl | -3% QoQ |
| PAT (continuing, pre-exceptional) | ₹194 crores | Exceptional ₹345 crores impairment |
| Reported PAT | ₹945 crores | Includes ₹1,097 crore one-time discontinued ops gain |
| Production (Gross) | 77.7 kboepd | Rajasthan 63.1, Offshore 11.6, OALP 3.1 |
Geographic & Segment Commentary
Vedanta Aluminium: Record quarter with 632 kt aluminium production (+5% YoY) and 389 kt VAP output (+14% YoY). Alumina production at 826 kt (+41% YoY) was 6% lower QoQ due to power plant stabilization, red mud filtration and bauxite handling issues. Captive alumina mix at ~70–72%; hot metal cost $1,698/t within FY27 guidance. BALCO Pot Line 3 ramping; Sigamali bauxite mine expected to start post-monsoon with 1–2 Mt in FY28 ramp to 6–7 Mt.
Vedanta Iron & Steel: Revenue +18% YoY with EBITDA margin expansion from 11% to 14% driven by better realization, favorable export market, and cost initiatives. Iron ore production 2.6 Mt (+4% YoY) with margin +24% YoY; QoQ moderated by seasonal impact, low-grade ore discounts and elevated ocean freight. Stage one forest clearance received for Bokaro expansion; ductile iron pipe project progressing.
Vedanta Power: DMER's entity effective 1 May 2026 with 4.2 GW operating capacity targeting 4.8 GW by FY27 end. Sales 5,224 MU (+38% YoY); Meenakshi delivered record EBITDA ₹112 cr with 65–70% Indian coal mix (up from imported). Shakti Unit 1 restart expected end Q2 FY27, Unit 2 by Q4 FY27; insurance claims notified.
Vedanta Oil & Gas: Gross operated production 77.7 kboepd with Rajasthan at 63.1 kboepd; natural reservoir decline managed through well interventions. FY27 cost expected aligned with FY26. Newly listed; rated AA Stable by CRISIL and ICRA.
Zinc & Copper (Vedanta Ltd): Zinc India refined metal 260 kt (+4% YoY) at lowest-ever cost $851/t; silver 46% of EBIT. Gamsberg Phase 1 production 45 kt (+10% QoQ) at $1,549/t (-7% QoQ), EBITDA/ton $900. Ferrochrome ore production record 153 kt (+41% YoY), best-ever EBITDA ₹101 cr. Copper India sales 53 kt (+3% YoY), highest Q1 in 8 years; Copper International rod sales -51% YoY due to Middle East supply chain disruption.
Company-Specific & Strategic Commentary
Demerger Value Unlocking: Combined market cap of resulting companies grew over ₹71,000 crores. Vedanta Ltd rated AA+ (ICRA, CRISIL) - highest in a decade - and VRL double-B equivalent across S&P, Moody's and Fitch, also a decade high.
Capital Allocation Discipline: Q1 deleveraging of ₹2,226 crores (group); VRL reduced from $10B to $5B debt over 3 years. New $5B refinancing program at VRL targets ~280 bps reduction in average funding cost, yielding >₹1,000 crores annual interest savings. Raised $1.7B international bonds at 7.4% coupon (8.5-yr maturity) and $2.25B syndicated loan at 6.4%.
Growth Pipeline: Vedanta Ltd targeting $5 billion EBITDA enterprise by FY30. Key projects: Gamsberg Phase 2 (+200 kt to 450 kt capacity, commissioning August), Zinc fertilizer plant (coal commissioning initiated), hot acid leaching (this quarter), 10 Mtpa smelting reprocessing (Q4 FY28), smelter 250 ktpa expansion (Q2 FY29), 3 Mtpa new aluminium project (drawing board phase).
Real Estate Unlocking: Plans to demerge ~2,000+ acres of industrial land into a pure-play company targeting ₹30,000 crores value; aspirational currently, timeline ~9–12 months via NCLT.
Hedging & Price Management: WAML hedged 28% of remaining FY27 volumes at $3,062/t average; Q2 hedged 270 kt at $2,830/t.
VRL Self-Sufficiency: Brand fee contract fixed through 2038, benchmarked at 3% (0.75% for power/copper); FY27 remaining cash need ~$400M (interest $300M + KCM $100M) funded via dividends (WAML interim ₹8/share = ~$175M to VRL), FY28 ~$1B ($330M loan + $350M interest + $350M KCM), FY29 ~$730M.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| WAML Hot Metal Cost (FY27) | $1,650–1,700/t | Unchanged; Q2 marginally higher due to planned monsoon power plant shutdown; $750/t alumina cost targeted in Q2 from $780 |
| WAML Cost Reduction (3-4 quarters) | $175–200/t lower | ~70% from alumina/bauxite (Langigarh ramp to 90% captive mix, Sigamali), balance from coal |
| Vedanta Ltd EBITDA (FY27) | ~$9.5–10B run-rate | Based on current volumes, cost position and macro tailwinds; 50% cash conversion → ~₹50,000 cr FCF |
| VRL Debt | $5B → $3B over 2 years | Deleveraging funded via brand fee + 4–5% dividend yield on each listed entity |
| Vedanta India Leverage | 0.9x → 0.7x by FY27 end | Consolidated |
| Group Capex (FY27) | ~₹20,000 crores | Growth + maintenance across 5 entities; WAML ~₹5,000 cr (incl. ₹2,000 cr maintenance), Vedanta Ltd ₹7,000 cr growth + ₹4,000 cr maintenance |
| BALCO Volumes | 260–270 kt FY27; 435 kt FY28 | Full Pot Line 3 commissioning by end Q2 FY27 |
| Kurloi Coal Mine | 2 Mt FY27; 8 Mt FY28 | Mining lease and mine opening permission received |
| Sigamali Bauxite | 1–2 Mt FY28; 6–7 Mt FY29 | Consent to operate expected Q2 FY27; post-monsoon start |
| Gamsberg | 450 kt capacity; $1,200/t cost | Phase 2 starts August; 300 kt near-term, 500 kt then 750 kt long-term |
| Oil & Gas Cost (FY27) | Aligned with FY26 levels | $17.4/bbl Q1, disciplined decline management |
| Shakti (SATI) | Unit 1 by end Q2 FY27; Unit 2 by Q4 FY27 | Unit 1 revival 26% complete; insurance claims being assessed |
| Dividend Policy | 4–5% yield per entity (WAML ~50% of group) | Descriptive vs prescriptive pre-demerger; boards have flexibility; WAML first dividend ₹8/share declared |
Risks & Constraints
| Risk | Context |
|---|---|
| Middle East Geopolitical Disruptions | Impacted copper international (rod sales -51% YoY), raised imported coal costs (+60%), furnace oil/carbon costs at WAML (mitigated by switching to domestic coal, now 65–70% Indian at Meenakshi; 100% target); WAML absorbed via cost guidance; lingering supply chain risk |
| Shakti Boiler Incident | ₹487 crore exceptional PAT impact; Unit 1 under revival (26% complete), insurance claims filed; EBITDA was impacted but Meenakshi record performance offset partially; Unit 1 restart targeted end Q2 FY27 |
| Alumina Stabilization | Q1 alumina production -6% QoQ from power plant, red mud filtration and bauxite handling issues; management confident of 4.0–4.1 Mt FY27 via H2-heavy trajectory |
| Oil & Gas Natural Decline | Production decline managed via well interventions but reservoir decline continues; revenue -3% QoQ due to seasonal sales pattern with ~85% of volumes sold; full-year cost guidance held |
| Regulatory/Approval Delays | Sigamali (consent to operate - Q2 FY27 expected), Bokaro expansion (stage 1 forest clearance received, stage 2 by end Q2), Papasai manganese (forest clearance stage 1), OMC bauxite procurement sub judice (impact on current mining mix); management expressed confidence in government engagement |
| Alumina Price Volatility (API) | Purchased alumina cost coming down with captive mix ramp (70–72% → 90%); each 10% mix shift reduces cost; further $50–60/t delta between captive vs bought-out alumina, $40–50/t additional from Sigamali |
Q&A Highlights
WAML EBITDA Reconciliation (Akhilesh Kumar, Emkay)
- Question: Why does slide-level EBITDA (₹10,527 cr) exceed reported (₹10,499 cr)?
- Answer: Difference is ₹28 crore intercompany elimination between BALCO and WAML. (Ajay Goel)
Alumina Production Trajectory (Indrajit Agarwal, CLSA)
- Question: Annualized Q1 run rate (~3.3 Mt) vs 4.0–4.1 Mt FY27 guidance - how to bridge?
- Answer: Monsoon months are difficult for alumina/power; H2 significantly higher, following same trajectory as last year. Confident of 4.0–4.1 Mt from Langigarh. (Rajesh Kumar)
Alumina Cost Path (Indrajit Agarwal, CLSA)
- Question: Purchased alumina cost delta and future reductions?
- Answer: Captive mix at 70–72% Q1; alumina cost $780/t Q1 heading to $750 in Q2; further reduction to $700 tied to Langigarh ramp and captive bauxite. Captive alumina ~$300/t cost vs bought-out; delta $50–60/t at current API; Sigamali adds another $40–50/t when ramping. (Anup Agarwal)
Hedging Details (Indrajit Agarwal/CLSA, Ritesh Shah/Investec)
- Answer: Q1 hedged 293 kt at $2,813/t; Q2 hedged 270 kt at $2,830/t; balance FY27 28% hedged at $3,062/t average. (Anup Agarwal)
Dividend & Capital Allocation (Indrajit Agarwal/CLSA, Sumangal Nevatia/Kotak, Ritesh Shah/Investec)
- Answer: Post-demerger policy is descriptive not prescriptive - boards have flexibility. Target 4–5% dividend yield on each entity's market cap; WAML (
$18–20B market cap) likely contributes ~50% of total payouts. Group EBITDA ~$9.5–10B run-rate with ~50% cash conversion means no trade-off between growth, deleveraging ($2–2.5B at VRL) and dividends in FY27. New 3 Mtpa aluminium project at drawing board; BALCO can participate; per-ton capex ~$2,500, spend heavily back-ended. (Ajay Goel)
VRL Deleveraging & Refinancing (Sumangal Nevatia/Kotak, Raashi Chopra/Citi)
- Answer: VRL debt $10B → $5B (June 30); targeting $3B in 2 years. FY27 remaining outgo: $400M ($300M interest + $100M KCM); FY28: ~$1B ($330M loan + $350M interest + $350M KCM); FY29: ~$730M. Brand fee fixed through March 2029 (3% for most, 0.75% power/copper). WAML interim dividend ₹8/share delivers ~$175M to VRL. (Ajay Goel)
Sigamali Bauxite Mine Approvals (Pinakin Parekh/HSBC, Sumangal Nevatia/Kotak)
- Answer: Only remaining approval is consent to operate (Q2 FY27 expected); MDO partner already appointed; bauxite mining has minimal overburden; post-monsoon start planned. Expect 1–2 Mt FY28, 6–7 Mt FY29. (Rajesh Kumar)
Kurloi Coal Mine (Pinakin Parekh/HSBC)
- Answer: 2 Mt FY27, 8 Mt FY28; mining lease and mine opening permission received. (Rajesh Kumar)
Hot Metal Cost Savings Levers (Jashandeep Singh/Nomura)
- Answer: $175–200/t reduction expected in 3–4 quarters: ~70% alumina+bauxite (Langigarh mix 70%→90%, Sigamali captive bauxite), ~30% coal (Ghogar Valley). WAML FY27 capex ~₹5,000 cr (₹2,000–2,500 cr BALCO); FY28 ~₹3,500–4,000 cr. WAML net debt ~₹29,500 cr as of June 30. (Anup Agarwal)
Shakti Power Plant Restart (Abhishek Poddar/Citadel)
- Answer: Revival 26% complete; contractor working for ~1 month; Unit 1 start by end-September/early-October; boiler inspector certification is the key final approval; no hurdles. Unit 2 on track for year-end; PPAs: 500 MW tied with Tamil Nadu (5-year) and 1-year Kerala contract at ₹5.96–5.97; being selective on remaining capacity. (Rajinder Singh Ahuja)
BALCO Ramp & Cash Deployment (Ashish Kejriwal/Nuvama)
- Answer: BALCO produced 24 kt from new line vs 22 kt plan; remaining 25% capacity commissioning now; total 260–270 kt FY27, 435 kt next year (full capacity exit Q2 FY27). BALCO net cash; options include Barra mines, coal gasification, power assets growth, potential participation in 3 Mtpa project; dividend/capital restructuring decisions quarterly. (Rajesh Kumar, Ajay Goel)
Copper International (Raashi Chopra/Citi)
- Answer: Rod sales -51% YoY from Middle East supply chain disruption; BMM Swartberg contract converted from fixed to variable cost model (Gamsburg substitution completed) to reduce costs; volume trajectory to 300 kt then 500 kt then 750 kt; at 450 kt, cost target $1,200/t. (Arun Misra)
Real Estate Value Unlocking (Ritesh Shah/Investec)
- Answer: 2,000+ acres at Vedanta Limited; demerger to pure-play real estate company targeted; ₹30,000 cr figure aspirational; ~9–12 month NCLT timeline; demerger led to many restructuring possibilities. (Ajay Goel, Arun Misra)
India Ratings Upgrade (Shubham Jain/Nippon India MF)
- Answer: India Ratings maintaining AA- with watch vs CRISIL/ICRA AA+; only a question of time; metrics and perception both supportive; expect rating committee action within weeks. (Ajay Goel)
Intercompany Transactions (Indrajit Agarwal/CLSA)
- Answer: Routine RPTs within governance compliance are normal for large conglomerates; no intercorporate loans/deposits being forced among the six Indian entities or to VRL. (Ajay Goel)
Key Takeaway
Vedanta Group delivered a landmark first post-demerger quarter with continuing operations achieving highest-ever EBITDA of ₹8,469 crores (+98% YoY) on revenue of ₹23,456 crores (+51% YoY) for Vedanta Limited, while WAML posted record revenue ₹21,005 crores (+45% YoY), EBITDA ₹10,499 crores (+134% YoY) and hot metal cost of $1,698/t (within FY27 guidance of $1,650–1,700). VISL delivered EBITDA growth of 54% YoY with margin expansion from 11% to 14%; Power grew sales 38% YoY despite the Shakti incident; Oil & Gas maintained cost discipline at $17.4/bbl with steady production. Strategic focus centers on completing growth projects (BALCO ramp to 435 kt FY28, Langigarh to 5 Mt, Gamsberg Phase 2 at 450 kt, Sigamali and Kurloi mines starting this year), maintaining disciplined capital allocation with VRL debt declining from $5B to $3B and combined leverage from 0.9x to 0.7x, while targeting 4–5% dividend yields per entity. Management guided to a $9.5–10B consolidated EBITDA run-rate with 50% cash conversion, eliminating trade-offs between deleveraging, growth CapEx (₹20,000 crores FY27) and shareholder returns. Key watch points include Shakti unit restarts, alumina stabilization in monsoon months, Middle East supply chain recovery, and regulatory approvals for Sigamali and Bokaro expansion, with the group positioning for a $5 billion EBITDA enterprise by FY30.