# 1. Financial Performance ## A. Key Figures * **Revenue:** **₹76,652 Cr** 1H FY26 (+6%) · **₹39,218 Cr** 2Q FY26 (+6%) * **EBITDA:** **₹22,358 Cr** 1H FY26 (+8%) · **₹11,612 Cr** 2Q FY26 (+12%) · Margin: **34–35%** (+69–75 bps) * **PAT before Exceptional Items:** **₹9,483 Cr** 1H FY26 (flat) · **₹5,026 Cr** 2Q FY26 (+13%) * Net Debt / EBITDA: **1.37x** (vs. 1.49x YoY) · **Net Debt:** **₹62,063 Cr** · **Cash:** **₹21,481 Cr** ## B. Revenue Growth * **Record Top-Line Performance:** Highest-ever quarterly and first-half revenue driven by **strong LME prices, forex gains, and premia**, partially offset by lower volumes in select segments. * **Mixed Segment Trends:** **Robust double-digit growth** in Oil & Gas and Iron Ore, while **non-core segments faced volume and pricing headwinds**, including **double-digit revenue declines** in Power and FACOR. * **Operational Leverage:** Revenue growth supported by **cost optimization and volume ramp-up**, particularly in key metals businesses despite volatile commodity averages. ## C. EBITDA Margin * **Margin Expansion Achieved:** EBITDA margin improved **69–75 bps YoY** to **34–35%**, driven by **operational efficiency, lower costs, and favorable forex**, despite inflationary pressures. * **Strong Segment Contributions:** **Zinc, Oil & Gas, and Iron Ore** delivered **solid margin performance**, while **Power and Aluminium** faced **cost and volume-related headwinds**. * **Capital Efficiency Gains:** **ROCE improved to ~26%** (+347 bps YoY), reflecting **disciplined capital allocation and improved asset productivity**. ## D. Profit After Tax * **Underlying Profitability Strengthened:** PAT before exceptional items rose **13% YoY in Q2**, driven by **higher EBITDA and lower finance costs**, despite a **higher effective tax rate of 28%**. * **Exceptional Items Weighed on Reported PAT:** **₹1,547 Cr net loss from exceptional items** (vs. gain of ₹1,136 Cr YoY), including **exploration write-offs and exchange losses**, led to a **38% YoY decline in reported PAT to ₹3,479 Cr in Q2**. * **Cost Discipline Maintained:** **Finance costs down 21% YoY** due to **lower interest rates**, while **depreciation rose 6% YoY** linked to **higher production at Zinc International**. ## E. Net Debt Ratio * **Leverage Improved Significantly:** Net Debt/EBITDA reduced to **37x** from **49x YoY**, reflecting **strong cash flow generation and balance sheet resilience**, despite **net debt increase to ₹62,063 Cr**. * **Subsidiary-Level Deleveraging:** **Hindustan Zinc, THLZV, and Talwandi Sabo** posted **notable net debt reductions**, while **Zinc International and Bloom Fountain saw increases** due to expansion. * **Funding Structure Optimized:** **$8 billion long-term debt** with **~3-year average term maturity** and **~5-year overall maturity**, with **$75 billion maturities due before March 2028**; **corporate action generated ~₹3,000 Cr** via HZL stake sale. --- # 2. Segment Performance ## A. Key Figures * **Aluminium Segment Revenue:** ₹15,671 Cr 2QFY26 (+14%) · ₹30,227 Cr 1HFY26 (+11%) * **Aluminium Segment EBITDA:** ₹5,532 Cr 2QFY26 (+33%) · ₹9,994 Cr 1HFY26 (+16%) * **Vedanta Aluminium EBITDA:** ₹3,637 Cr 2QFY26 (+20%) · ₹6,902 Cr 1HFY26 (+11%) * **BALCO EBITDA:** ₹1,895 Cr 2QFY26 (+68%) · ₹3,092 Cr 1HFY26 (+29%) * **Iron Ore EBITDA:** ₹108 Cr 2QFY26 (–21%) · ₹312 Cr 1HFY26 (–3%) * **Steel Segment Revenue:** ₹1,463 Cr 2QFY26 (–22%) · ₹3,293 Cr 1HFY26 (–16%) * **Steel EBITDA:** ₹(69) Cr 2QFY26 (loss) · ₹56 Cr 1HFY26 (–75%) * **Copper Segment Revenue:** ₹6,604 Cr 2QFY26 (+4%) · ₹12,978 Cr 1HFY26 (+17%) * **Copper EBITDA:** ₹(13) Cr 2QFY26 (loss) · ₹(39) Cr 1HFY26 (loss, improved from ₹(67) Cr) * **Power EBITDA:** ₹228 Cr 2QFY26 (+18%) · ₹688 Cr 1HFY26 (+45%) * **FACOR EBITDA:** ₹21 Cr 2QFY26 (turnaround) · ₹67 Cr 1HFY26 (+49%) ## B. Aluminium Performance * **Record Margin Achievement:** Aluminium segment achieved highest margin in 14 quarters at **943 $/t**, reflecting strong cost control and pricing power. * **Robust Segment Profitability:** Aluminium EBITDA surged on strong contributions from both Vedanta Aluminium and BALCO, with **BALCO delivering exceptional 68% YoY growth** in 2Q. ## C. Zinc & Silver Dynamics * **Operational Efficiency Peak:** Zinc India posted record Q2 mined production and achieved **lowest 5-year cash operating cost of $994/t**, down 7% YoY. * **Silver Leverage:** Silver contributes **~40% of overall profit**, enhancing earnings resilience amid rising precious metal prices. ## D. Power & Other Segments * **Power EBITDA Growth:** Merchant power EBITDA rose significantly, with **new Athena and Meenakshi plants contributing 45%** of 2Q earnings despite lower PLF at Jharsuguda. * **Steel Deterioration:** Steel segment faced sharp revenue and margin contraction, with **2Q EBITDA loss widening to ₹(69) Cr** amid challenging market conditions. * **Copper Loss Reduction:** Copper segment showed improving trend with **1HFY26 EBITDA loss reduced by 42% YoY**, signaling progress in turnaround efforts. --- # 3. Production & Output ## A. Key Figures * **Alumina Production:** **653 kt** quarter (+31%) · **1,240 kt** half-year (+19%) * **Aluminium Production:** **617 kt** quarter (+1%) · **1,222 kt** half-year (+1%) * **Zinc International Mined Metal:** **60 kt** quarter (+38%) · **117 kt** half-year (+44%) * **Pig Iron Production:** **238 kt** quarter (+26%) · **451 kt** half-year (+14%) * **Power Generation:** **3,889 MU** generated (+9% YoY) * Oil & Gas Production: 89.3 kboepd average gross operated (-15% YoY) ## B. Metal Production * **Record Alumina Output:** Lanjigarh Train II ramp-up drove **strong double-digit quarterly growth** and best-ever production across alumina and aluminum streams. * **Zinc Production Surge:** International zinc output expanded at a **robust pace**, led by **54% YoY growth at Gamsberg**, while domestic zinc hit record volumes. * **Steel Segment Divergence:** Billet and value-added steel products (TMT, wire rod) showed **strong growth (up to +59% YoY)**, offsetting declines in pig iron and ductile pipes due to planned maintenance. * **Copper & Ferrochrome Volatility:** Copper cathode output rose **37% YoY in 1H**, but ferrochrome production declined **28% YoY in Q2** amid operational adjustments. ## C. Ore & Concentrate * **Exploration Expansion:** Drilling advanced in **six wells across Rajasthan** and commenced in **Western Offshore (Dwarka)**, signaling commitment to resource sustainability. * **Concentrate Sales Growth:** International zinc-lead concentrate sales surged **+33% YoY in Q2**, reflecting stronger off-take and processing throughput. * **Iron Ore Dispatch Capacity:** Enhanced to **3 crore DMT/month**, supporting higher sales volumes despite monsoon-related QoQ moisture challenges. ## D. Power Generation * **Power Capacity Leap:** Commissioning of **Meenakshi (1,000 MW)** and **Athena (600 MW)** added **3 GW**, boosting merchant capacity to **2 GW** and driving record generation. * **Generation Records Set:** Total power generation reached an all-time high, with **Meenakshi achieving 48% PLF** post-commissioning despite lower output at legacy assets. ## E. Capacity Utilization * **High Thermal Plant Availability:** TSPL maintained **90% PAF** in Q2 and 1H, indicating stable operations and efficient maintenance planning. --- # 4. Cost & Input Trends ## A. Key Figures * Gamsberg COP: 8% lower YoY in 1HFY26 * **Lanjigarh Alumina COP:** **$379/MT** 2QFY26 (+7% YoY) · **$379/MT** 1HFY26 (+12% YoY) * **Aluminium Segment COP:** **$1,796/MT** 1HFY26 (+4% YoY) · **Jharsuguda:** $1,773/MT (+6%) · **BALCO:** $1,866/MT (–2%) * **Zinc Cash COP (w/o royalty):** **$1,002/MT** 1HFY26 (–8% YoY) · **With royalty:** $1,374/MT (–6% YoY) * **FACOR Margin:** **$168/MT** 1HFY26 (+66% YoY) * **Power Cost:** **$529/t** half-yearly average (lowest in 8 periods) * **Interest Cost:** ~**9%** closing 2QFY26 (–150 bps YoY) · ~**10%** portfolio average ## B. Cost Performance by Segment * **Zinc Cost Leadership:** Achieved five-year low production costs across Zinc India, driven by operational efficiencies and lower input expenses. * **Alumina & Aluminium Inflation:** Lanjigarh alumina costs rose **double-digits YoY**, while Jharsuguda aluminium COP increased moderately; cost pressures partially offset by BALCO’s **improved cost performance**. * **Gamsberg Margin Pressure:** Higher COP at Gamsberg due to increased treatment charges, ramp-up costs, and adverse forex moves. ## C. Energy & Input Costs * **Power Cost Optimization:** Achieved lowest half-yearly power cost in eight cycles despite inflationary trends, reflecting improved sourcing and asset-level efficiency. * **Net Interest Outflow:** Interest expense (~9–10%) exceeds income (~7%), though refinancing has reduced overall borrowing costs and extended maturity profile. ## D. Exchange Effects & Financing * **Debt Refinancing Success:** Parent VRL refinanced **$550 million** at lower rates, reducing interest burden and extending average maturity to **~5 years**. --- # 5. Capital & Capacity Expansion ## A. Key Figures * Capex: $0.9 Bn in H1 * Merchant Power Capacity: +1.3 GW (total now 4.2 GW post-commissioning) * **Debt Refinancing:** **$550 Mn** refinanced, lowering interest cost to **~10%**, extending maturity to **~4.5 years** * **Project Progress:** **Gamsberg Phase 2** 82.4% complete, **targeted completion in 2HFY26** * **Drilling Plan:** **3–5 wells** planned in KG Deepwater in **2QFY27** ## B. Growth Capex & Strategic Investment * **Disciplined Capital Allocation:** Sustained high-growth capex focused on **value-accretive expansions** across metals, power, and mining verticals. * **Major Projects in Execution:** Significant unspent capex across key projects including **INR 12,000 Cr 250 KTPA Zinc Complex**, **INR 11,226 Cr Balco expansion**, and **INR 8,245 Cr Coal & Bauxite mines**, indicating multi-year investment runway. * **Rail & Logistics Infrastructure:** Commissioning of **ESL Railway Siding and Raw Material Handling System** enhances operational efficiency. * **Zinc Tailings Reprocessing:** Board approval for **India’s first 10 Mtpa zinc tailing reprocessing plant** at Rampura Agucha signals resource optimization push. ## C. Project Commissioning & Operational Milestones * **First Metal & Alumina Achieved:** **BALCO’s 525 kA smelter** and **Lanjigarh’s 5 MTPA Train-II alumina refinery** commenced production, marking major capacity ramp-ups. * **Power Capacity Expansion:** **600 MW Athena Unit 1** commercialized; **1,000 MW Meenakshi** and **600 MW Athena** commissioned, bringing merchant power to **2 GW**. * **Downstream Zinc Enhancement:** **160 KTPA Debari Roaster** operational, improving zinc processing and by-product recovery (including **27 TPA silver**). * **Near-Term Commissioning Pipeline:** Multiple projects including **Bicholim Mine expansion**, **Cudnem Mine**, **DI Pipe Plant**, and **Ghogarpalli Coal Mine** expected in **FY26**. ## D. Smelter Ramp-up * **BALCO Smelter Milestone:** Successful **first metal pour** from India’s largest smelter (525 kA) confirms technical readiness and sets stage for volume ramp-up. ## E. Mine Development * **Critical Minerals Expansion:** Secured **3 additional mining blocks**, increasing total to **11**, reinforcing long-term resource security. * **Renewable Energy Integration:** **3 GW round-the-clock (RTC) PPAs** in place, supporting decarbonization and energy self-sufficiency goals. --- # 6. Commodity & Market Risks ## A. Key Figures * **Aluminum LME Price:** **$2,618/MT** 2QFY26 (+10%) · **$2,535/MT** 1HFY26 (+4%) * **Zinc LME Price:** **$2,825/MT** 2QFY26 (+2%) · **$2,736/MT** 1HFY26 (–2%) * **Lead LME Price:** **$1,966/MT** 2QFY26 (–4%) · **$1,957/MT** 1HFY26 (–7%) * **Copper LME Price:** **$9,797/MT** 2QFY26 (+6%) · **$9,664/MT** 1HFY26 (+2%) * Silver LBMA Price: $39.4/oz 2QFY26 (+34%) · $36.6/oz 1HFY26 (+26%) * Oil Price Realization: $66.1/bbl 2QFY26 (–13%) · $65.8/bbl 1HFY26 (–15%) * Gas Price Realization: **$14.0/mscf** 2QFY26 (+2%) · **$13.8/mscf** 1HFY26 (+13%) * **Cairn Price Realization:** **$69.7/boe** 2QFY26 (–10%) · **$69.7/boe** 1HFY26 (–9%) ## B. Price Volatility & EBITDA Sensitivity * **Aluminum Price Sensitivity:** A 10% increase in aluminum prices drives a **$276 million EBITDA uplift**, the largest exposure among commodities. * **Zinc and Silver Leverage:** Zinc price moves impact EBITDA by **$123 million** per 10% shift; silver contributes **$36 million**, highlighting material earnings leverage. * **Lead and Oil Drag:** Lead price decline pressures margins, while oil realization weakness offsets some gas gains, creating mixed hydrocarbon revenue trends. ## C. LME Exposure * **Mixed Metal Trends:** Zinc and silver prices showed strong YoY gains in 2Q, but lead remains under pressure; full-half zinc average declined despite quarterly rebound. * **Silver as Outperformer:** Silver emerged as the top-performing metal with **34% YoY gain in 2Q**, signaling strong industrial and investment demand tailwinds. ## D. Forex Sensitivity * **INR Depreciation Benefit:** With **80% INR-denominated debt**, a ₹1 weakening vs USD boosts EBITDA by **₹850–900 crore annually**, providing structural forex tailwind. ## E. Regulatory Disputes & Sustainability * **Sustainability Milestone:** Hindustan Zinc became the **first Indian miner to join ICMM**, elevating ESG credentials and aligning with global best practices. * **Emissions Reduction:** Underground mining emissions cut by **~30%** via India’s first diesel-electric LHD, showcasing operational decarbonization progress. * **Credit Profile Stable:** AA ratings reaffirmed by CRISIL and ICRA, though on **Watch with Developing Implications**, reflecting ongoing scrutiny. * **Cambay Block Dispute:** MoPNG rejected PSC extension; production continues pending legal outcome, introducing near-term regulatory uncertainty. --- # 7. Guidance & Outlook ## A. Key Figures * **FY26 EBITDA Guidance:** **>USD 6 Bn** (vs. FY22 high) * **Alumina Production:** **5–6 Mnt** * **Aluminium Production:** **5–7 Mnt** · **CoP: $1,700–$1,750/t** (ex-royalty) * **Zinc India Mined Metal:** **2–3 Mnt** · **Finished Metal: 950–1,050 kt** * **Silver Production (Zinc India):** **670–690 t** · **CoP: ~$1,000/t** * Iron Ore Production: Karnataka: 5.5–6.1 Mnt · Orissa: 4.5–5.2 Mnt · Goa: 1,115–1,135 kt * **Pig Iron Production:** **1,065–1,085 kt** * **Zinc International Production:** **Gamsberg: 180–200 kt** · **BMM: 55–65 kt** · **CoP: $1,250–$1,350/t** * **Oil & Gas Volume:** **90–95 kboepd** · **Opex: $15–16/boe** * **Power Plant PLF:** **TSPL PAF/Athena: 85%** · **Meenakshi: 61%** · **ESL Hot Metal: 52%** * **FACOR Ferrochrome Output:** **100–110 kt** ## B. Cost Forecasts * **EBITDA Outlook:** Full-year FY26 EBITDA expected to exceed the historic FY22 peak, underpinned by higher capacity utilization and recovering commodity prices. * **Cost Resilience:** FY26 guidance remains intact despite elevated costs, as **CoP pressures were pre-embedded in forecasts**. ## C. Production Guidance * **Scaled Output Targets:** Broad-based production guidance across commodities signals aggressive ramp-up, particularly in alumina, aluminium, and iron ore. * **Efficiency Benchmarks:** Guided CoP levels for zinc, silver, and aluminium reflect cost discipline amid inflationary pressures. * **Regional Production Clarity:** Iron ore output guidance now regionally disaggregated, highlighting Orissa as the core producing hub.