Vedanta Ltd Q2 FY2026 Concall Summary

Key Takeaways

• Record production, mixed prices: Aluminum, alumina, zinc and pig iron all hit quarterly or half-yearly records, but softer zinc and oil realizations kept the top-line benefit in check.
• EBITDA up 12% YoY, margin expands: Higher premiums and forex gains drove the beat, lifting margin to 34% (ex-custom smelting and one-offs), even as Zinc International costs rose and Steel swung to a loss.
• The growth capex is now producing metal: BALCO's 525 kA smelter and Lanjigarh Train II delivered first output, and merchant power capacity jumped to 4.2 GW, setting up the volume ramp that underpins the "best-ever EBITDA" guidance.
• Parent refinancing lowers risk: Vedanta Resources refinanced \$550 mn of high-cost debt, cutting interest ~160 bps to ~10% and extending maturity to ~4.5 years, while consolidated net debt/EBITDA improved to 1.37x.
• What to watch next quarter: Whether the ASP injection at Mangala begins on schedule, the pace of the Jharsuguda PLF recovery, and any resolution on the Cambay PSC extension, now sub-judice.

Production Ramp-Up

• Aluminum and alumina hit records: Quarterly cast metal production reached 617 kt (+1% YoY) and alumina 653 kt (+31% YoY), driven by first metal from BALCO's 525 kA smelter and first alumina from Lanjigarh Train II. The segment posted its highest margin in 14 quarters at \$943/t.
• Zinc India mined metal at a Q2 high: Mined metal content rose 1% YoY to 258 kt, while the cost of production fell to a five-year low of \$994/t (down 7% YoY), aided by higher volumes and operational efficiencies. Refined lead and silver production, however, fell sharply.
• Zinc International volumes surge, costs lag: Gamsberg production jumped 54% YoY to 49 kt, lifting total mined metal 38% YoY to 60 kt. But CoP rose 24% YoY to \$1,482/t on higher treatment charges and forex, compressing margins; FY26 cost guidance is unchanged as those headwinds were already factored in.
• Pig iron and power capacity expand: Record quarterly pig iron production of 238 kt (+26% YoY) was achieved, while merchant power capacity reached 4.2 GW with the commissioning of Athena (600 MW) and Meenakshi (1,000 MW). The new power assets contributed 45% of the merchant thermal EBITDA.
• Iron ore held back by monsoons: Saleable ore production at IOG rose 48% YoY but declined QoQ due to monsoon-related moisture slowing operations. Goa production fell 28% YoY on a planned one-month furnace shutdown.

Misra: "Our H1 FY26 performance reflects Vedanta's resilience. We delivered 8% YoY EBITDA growth in a period marked by uncertainties and lower prices of key commodities that we deal with versus the annual average of FY25."

Segment Profitability

Balance Sheet & Deleveraging

• Leverage improving: Consolidated net debt/EBITDA improved to 1.37x from 1.49x a year ago, while the credit rating was reaffirmed at AA by both CRISIL and ICRA. Standalone net debt rose QoQ to ₹43,521 cr, partly reflecting capex drawdowns.
• Parent refinancing de-risks the holdco: Vedanta Resources refinanced \$550 mn of high-cost debt through a bond issue, reducing the interest rate from ~11.6% to ~10% and extending average debt maturity to ~4.5 years. Parent net debt/EBITDA stood at ~1x for FY25, down from 3.3x in FY24.
• HZL stake sale adds liquidity: Approximately ₹3,000 crore was raised via a Hindustan Zinc stake sale during the quarter, while HZL's own net debt reduced to ₹2,547 cr from ₹4,184 cr QoQ.
• Debt maturity runway: Only \$0.75 bn in maturities are due through March 2028, and the consolidated closing interest cost is down ~150 bps YoY to ~9%.

Goel: "The reaffirmation in credit rating at AA by both Crisil and ICRA highlights our financial strength and markets' confidence in the Vedanta's growth story."

Project Pipeline & Milestones

• Two flagship projects delivered first output: BALCO produced first metal from India's largest 525 kA smelter, and Lanjigarh produced first alumina from Train II under the 3 MTPA expansion. Both are now ramping toward full capacity.
• Power capacity doubled down: Athena Unit 1 (600 MW) was commercialized and Meenakshi reached its full 1 GW commissioned capacity. Athena Unit 2 (600 MW) is expected to begin commissioning in Q4 FY26.
• Zinc India debottlenecking progressing: The 160 KTPA Debari roaster was commissioned, the Dariba smelting complex debottlenecking was completed, and the board approved India's first zinc tailing reprocessing plant (10 Mtpa) at Rampura Agucha.
• Oil & gas activity set to pick up: Six wells were drilled across RDG, Saraswati and Mangala ASP (Cluster C), with ASP injection targeted for mid-Q3 FY26. A 3-5 well program in the KG deepwater block is being planned for Q2 FY27.
• Iron ore and steel infrastructure added: A letter of intent was received for the Bicholim mine expansion (3 to 3.6 MTPA), and ESL Steel commissioned its railway siding and raw material handling system.
• ESG milestone: Hindustan Zinc became the first Indian company to join the International Council on Mining and Metals, its first new member since 2021.

Guidance & Commitments

Key Metrics