Record Performance Across Key Businesses
Ajay Goel, CFO, Vedanta said the year gone by has been exceptional for the group, with all major financial indicators hitting historic highs.
“The year gone by has been truly historic. If we look at both the fourth quarter and total year, all three key metrices be it revenue, EBITDA, and the PAT has been historical best by a big margin,” he noted.
He added that both aluminium and zinc businesses delivered standout performance, with margins remaining significantly elevated.
“You are right in couple of large businesses which is zinc and aluminium our margins are quite superlative. So, the margin right now in aluminium is almost 38%. Zinc it is at 50% plus,” Goel said.
He attributed the strong profitability to higher volumes, structurally lower costs, and improved positioning on the global cost curve. According to him, both zinc and aluminium units now sit in the top decile of global production costs, aided by portfolio upgrades toward value-added products.
On sustainability, Goel remained confident: “We do foresee in the near future the margins will hold at the same levels if not better off.”
Demerger Timeline and Listing Roadmap
On the much-anticipated demerger and listing of the newly carved-out entities, management provided a clearer timeline.
Goel confirmed that the demerger will become effective from 1 May, which will also act as the record date. Listing applications will be filed in early May.
“All the four companies will get listed and all the four new companies stock will begin to trade between 15th June till end of June. So, listing and trading all within the Q1,” he said.
Debt Allocation Strategy Post Demerger
Arun Misra,ED, Vedanta elaborated on how debt will be distributed among the demerged entities, stressing that allocation has been aligned with each unit’s cash flow strength and capital needs.
“The principle for debt allocation has been the ability of every unit to serve the debt… based on projected cash flows, projected EBITDA, and capex requirement,” Misra said.
He explained that while consolidated leverage stands at around 0.95x EBITDA to debt, individual entities will see differentiated levels depending on their business profiles.
“Individual units may vary from 0.45 to maybe 1.45. So, it all remains within the similar kind of or better than the industry peers as far as debt-EBITDA ratio is concerned,” he added.
Capital Allocation Focus Remains Growth-Led
Misra also clarified that capital allocation priorities will remain unchanged even after the restructuring.
“For Vedanta, it has always been capital allocation for growth because we are primarily a growth company,” he said.
He outlined three key priorities: growth investments, operational improvements and debottlenecking, and maintenance capex.
Importantly, all projects will continue to be evaluated strictly on returns. “Nobody would be investing in a project where the IRR is… returns are lesser than say 18% or 19%,” Misra stated.
Dividend Philosophy and Shareholder Returns
On dividend expectations post demerger, Ajay Goel said each of the five entities will have independent boards and policies, but the group’s broader shareholder-friendly philosophy will remain intact.
“The way to look at post demerger not only dividend but what is the shareholder return,” he said, pointing to strong historical performance where Vedanta delivered nearly 50% total shareholder return last year.
He indicated that while dividend policies may be individually determined, high payouts and shareholder rewards will remain central to the group’s identity.
Deleveraging Plan for Vedanta Resources
On the ₹4.7 billion debt at Vedanta Resources level, management reiterated a clear deleveraging trajectory.
Ajay Goel highlighted significant progress already made, noting that debt has fallen from $9 billion to under $5 billion over the past three years.
“The VRL… will go down to 3 billion over three years and in fact, we will do more, we will do faster,” he said.
No Immediate Plans for Stake Sale or Asset Divestment
Addressing speculation around potential stake sales or asset monetisation, including in the steel business, management ruled out any immediate divestments.
“Right now, we do not intend to divest any businesses. We intend to grow them to the fuller scale,” Goel clarified.
However, he acknowledged that post demerger, the company may explore differentiated capital structures and attract thematic global investors across sectors such as aluminium, oil and gas, and iron and steel.
Vedanta enters its post-demerger phase with strong operational momentum, record margins, and a clearly defined listing and deleveraging roadmap. While the management remains focused on growth-led capital allocation, the next phase will test execution across multiple independently listed entities.
