Vedanta Expects Aluminium Margin To Reach $1,000 Per Tonne In FY26
Vedanta expects aluminium production growth to be driven by the commissioning of additional capacities and cost to be reduced by around 10%.
Vedanta Ltd.'s aluminium margin can cross $1,000 per tonne in financial year 2026 from the current levels of $850 per tonne, according to Chief Financial Officer Ajay Goel.
It will make the aluminium segment the company's most profitable business and help in increasing its Ebitda, he said in a conversation with NDTV Profit on Friday.
"Our focus remains on aluminium. We are working on volume augmentation and cost completion," Goel said.
In the current fiscal, as the refinery ramps up in aluminium, Vedanta's aluminium margin may go from almost $850 per tonne to more than $1,000 per tonne. In that case, aluminium becomes its most profitable business, helping in terms of Ebitda augmentation, according to the CFO.
Executive Director Arun Misra said the company will see a 10% reduction in the cost of producing aluminium in this financial year.
Misra said the growth in aluminium production will come from the commissioning of additional capacities that have already been set up. It will include volumes from the Balco expansion project, along with certain debottlenecking projects in Jharsuguda, Odisha.
By the end of the year, the company expects to achieve a capacity of 4 million tonnes per annum at the Lanjigarh alumina refinery in Odisha. The company's regional bauxite mines are expected to be commissioned in Q2 and will start production towards the end of the quarter, Misra said.
"We recognise that global alumina and bauxite prices are trending lower, so our purchased bauxite will cost less. By increasing the proportion of our own bauxite in the overall aluminium production, we anticipate a cost reduction of approximately 10%," Misra said.
In the oil and gas segment, the company will see a decline in production in FY26. Misra said a decline is "natural" after a period of sustained production. The company is now targeting an arrest of this decline by injecting alkaline surfactant polymer in oil fields.
"We are looking at new production areas. We plan to deliver about 1,05,000 barrels of oil equivalent in the FY26. In Q4 FY25, we finished at about 97,000 barrels," Misra said.
Goel emphasised the strong demand for aluminium in India and globally over the past year. He said Vedanta has an "advantage of home demand".
"Demand in India is growing at about 12% annually. Current spot aluminium prices are around $2,500 per tonne, and consensus suggests a rise to $2,750 per tonne, levels seen last year," Goel said.
In Q4 FY25, Vedanta's profit after tax rose 118% year-on-year to Rs 4,961 crore. Its consolidated Ebitda increased 30% year-on-year to Rs 11,618 crore and its Ebitda margin stood at 35%.
Shares of Vedanta closed 1% lower at Rs 414.95 apiece on the BSE on Friday, compared to a 0.32% advance in the benchmark Sensex.
