Vedanta Ltd Q3 FY2026 Concall Summary

Key Takeaways

• Record EBITDA, broad-based volume strength: Consolidated EBITDA hit ₹15,171 crore (+34% YoY), the highest ever, driven by record production across aluminium, alumina, zinc and ferrochrome, plus lower costs and higher LME.
• Aluminium and Zinc India carried the quarter: Aluminium delivered its strongest-ever EBITDA margin of \$1,268/t with CoP down 11% YoY; Zinc India posted its highest-ever quarterly EBITDA of ₹6,064 crore at a 5-year low CoP of \$940/t.
• Oil & Gas remains the drag: Production fell 15% YoY to 84.9 kboepd on natural decline and lower well intervention, while the Cambay block PSC extension is now sub-judice, with operations continuing under a court-ordered status quo.
• Balance sheet strengthening continued: Net Debt/EBITDA improved to 1.23x from 1.40x a year ago; VRL refinanced \$550 mn of high-cost debt, cutting its blended interest cost to ~10% and extending maturity to ~4.5 years, with all three rating agencies revising the outlook to Positive.
• What to watch next quarter: Whether the Gamsberg Phase 2 ramp-up hits its Q1FY27 target, the pace of Oil & Gas decline stabilization, and any resolution or escalation in the Cambay block litigation.

Aluminium: The Quarter’s Standout Performer

• Record production, record margins: Alumina output at Lanjigarh surged 57% YoY to 794k tonnes on the Train II ramp-up, while aluminium production also hit a quarterly and 9-month record. The segment posted an EBITDA margin of \$1,268 per ton, its strongest ever.
• Cost of production fell to a 17-quarter low: Hot metal CoP dropped 11% YoY in dollar terms to \$1,674/MT, driven by lower alumina costs and improved power operations following the overhaul. LME prices rose 10% YoY to \$2,827/MT, widening the margin tailwind.
• Growth capex is underway: BALCO smelter expansion to 435 KTPA has begun commissioning in FY26; Lanjigarh Train-2 expansion from 3.5 to 5 MTPA is targeted for ramp-up through FY27/FY28. The Sijimali bauxite mine is slated for 1HFY27, which would further integrate the cost curve.

Misra: "Q3 FY26 has been a landmark quarter for Vedanta, delivering our highest-ever EBITDA of ₹15,171 crore, with two of our businesses achieving their best-ever financial results."

Zinc India: Low Costs, High Silver Contribution

• Highest-ever quarterly EBITDA: Zinc India delivered ₹6,064 crore in EBITDA (+34% YoY) on record mined and refined metal output. Mined metal content rose 4% YoY to 276k tonnes.
• Cost leadership reinforced: Zinc CoP without royalty fell 10% YoY in dollar terms to \$940/MT, the lowest Q3 figure in five years. Zinc LME was up only 4% YoY to \$3,165/MT, so the margin expansion was overwhelmingly cost-driven.
• Silver is now a material profit driver: Saleable silver production rose 10% QoQ, contributing 44% of the segment’s overall profit. The LBMA silver price surged 74% YoY to \$54.7/oz, amplifying the benefit.
• Debottlenecking complete: The Chanderiya Lead-Zinc Smelter and Dariba Smelting Complex debottlenecking added 21 Ktpa of refined zinc capacity, positioning the segment for further volume growth.

Oil & Gas: Production Decline and a Legal Overhang

• Production fell across all assets: Average daily gross operated production dropped 15% YoY to 84.9 kboepd, with declines in Rajasthan (-15%), Ravva (-15%), and OALP (-14%). The driver was natural decline and lower well intervention activity in the Cambay block.
• Revenue and EBITDA compressed: Segment revenue fell 10% YoY to ₹2,366 crore, EBITDA down 18% YoY to ₹989 crore. Average oil price realization also declined 13% YoY to \$61.3/bbl, compounding the volume pressure.
• Cambay block PSC extension is now in litigation: The Ministry of Petroleum and Natural Gas rejected the joint venture’s application for a PSC extension. Vedanta challenged the rejection in the Delhi High Court, which on 6 January 2026 directed the parties to maintain status quo. Vedanta continues to operate the block, but production volumes beyond 31 December 2025 are subject to the litigation’s outcome.
• Growth projects are advancing despite the overhang: The ASP injection project at Mangala Cluster C is targeted for Q4FY26; deep gas exploration in the Barmer Basin is underway with the first well drilled and a second drilling; three wells were drilled across RDG, Saraswati and Mangala ASP in Q3.

Balance Sheet & Credit: Deleveraging and Rating Momentum

• Leverage improved meaningfully: Net Debt/EBITDA fell to 1.23x from 1.40x in Q3FY25, supported by strong cash generation and debt reduction. The closing interest cost for Q3FY26 stood at ~9%, down ~160 bps year-on-year.
• VRL refinancing de-risked the maturity profile: Vedanta Resources refinanced \$550 mn of high-cost debt, reducing its blended interest cost to ~10% (ex-ICL) and extending average maturity to ~4.5 years. Average term debt maturity at the Vedanta Ltd level is maintained at ~3 years.
• Rating outlook upgraded across the board: S&P, Moody’s and Fitch all revised their outlook on Vedanta Resources to Positive from Stable. Post the NCLT demerger order on 16 December 2025, CRISIL and ICRA reaffirmed Vedanta Ltd’s AA rating with Watch with Developing Implications.

Goel: "The reaffirmation of our AA credit rating by CRISIL and ICRA following the NCLT demerger order, along with upgrades in VRL credit rating outlook from Stable to Positive by S&P, Moody's & Fitch Ratings, underscore the market confidence in Vedanta's growth trajectory."

Other Segments: Power Surges, Steel Struggles

• Power had a breakout quarter: EBITDA surged 188% YoY to ₹363 crore, the highest operational EBITDA on record, driven by a 62% YoY increase in sales volumes to 3,852 MU. The commissioning of the Athena and Meenakshi power plants supported the volume ramp.
• Steel turned EBITDA-negative: Segment EBITDA swung to a loss of (₹37) crore from a positive ₹146 crore in Q3FY25. The margin turned negative at (\$13)/t versus \$54/t a year ago, despite record billet production of 285 kt. Ductile iron pipe production fell 55% YoY to 15k tonnes.
• Zinc International grew volumes, not margins: Gamsberg production jumped 40% YoY to 49k tonnes, driving total mined metal content up 28% YoY. Revenue rose 24% YoY to ₹1,299 crore, but CoP increased 38% YoY to \$1,632/MT, limiting EBITDA growth to 17% YoY.
• Iron Ore mixed: Revenue up 5% YoY to ₹1,953 crore on a 4% increase in saleable ore production, but EBITDA fell 24% YoY to ₹284 crore, suggesting cost or realization pressure.

Demerger, Growth Projects & ESG Milestones

• Demerger order unlocks the structure: The NCLT approved the Vedanta demerger on 16 December 2025, triggering Ind AS 105 accounting treatment for depreciation and moving the group into what management calls an “exciting phase of growth and value unlocking.”
• Growth capex pipeline is \$1.3 bn: Key milestones include the Gamsberg Phase 2 ramp to 200 KTPA MIC in 1HFY27 (currently 89.3% complete), the Kuraloi coal mine in Q4FY26, the Ghogarpalli coal mine in 2HFY27, and hot metal capacity expansion from 1.7 to 3.5 MTPA in 2HFY27.
• ESG recognition is accumulating: Vedanta Aluminium ranked second in the S&P Global CSA for the third consecutive year; Cairn Oil & Gas placed among the top five globally in its sector and earned UNEP’s Gold Standard Pathway under OGMP 2.0; the group’s CDP Water rating improved from B to A-minus.

Guidance & Commitments

Key Metrics