Analyst Concall
Vedanta says demerger to be completed by Sept-end as planned
This story was originally published at 22:26 IST on 31 July 2025
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Informist, Thursday, Jul. 31, 2025
--Vedanta: Have only 3% exposure of aluminium business to US
--CONTEXT: Comments by Vedanta's management in post-earnings analyst call
By Pallavi Singhal
NEW DELHI – Vedanta Ltd.'s scheme of demerger is progressing in line with the previously shared timeline of Sept. 30, the management said in a post-earnings conference call with analysts and investors Thursday. Giving an update on the demerger motion before the National Company Law Tribunal, the management said the hearing on the second motion petition has begun, with the first hearing held Jul. 2.
The management said it is working to address concerns raised by the Ministry of Petroleum and Natural Gas. At the previous hearing at the tribunal, the ministry had expressed concern about non-payment of any disputed dues. The management said it is working to arrive at a solution at the earliest.
According to the management, "false narratives" are being spread to target the company. Without naming US-based short-seller Viceroy Research, which has made several allegations of misgovernance and promoter-related issues in the Vedanta group, the management said it was "malicious propaganda by a short-seller with an ulterior motive of profit-booking".
The Vedanta Group, a diversified mining and metals company, is targeting production of 95,000-100,000 barrels of oil per day in its oil and gas segment in the current financial year. This is 15% lower than the actual oil production in the previous year. The company plans to manage the decline by adding new wells and increasing production from existing fields. According to the latest guidance by the company, new wells drilled in the previous year will contribute around 8,000 barrels of oil equivalent per day, while additional wells planned for this year will add around 5,000 barrels of oil equivalent per day. This will help the company achieve its target production range for FY26.
The company expects to add 1,600 megawatts of new capacity in the September quarter, the management said. The Meenakshi Power Plant in Nellore, Andhra Pradesh, will have a total capacity of 1,000 megawatts while the Athena Power Plant, also in Nellore, will have a capacity of 600 megawatts, it said. The company expects to commission the Lanjunga-Bhalumunda rail line and a 435,000-tonne capacity expansion at its Bharat Aluminium Co. Ltd. smelter in the current quarter. "The average alumina cost per tonne is likely to decline further with improved reflection of lower market prices and increased share of captive production," the management said.
Vedanta is also targeting the commissioning of a 160,000 tonne per annum roaster at Debari in Udaipur, Rajasthan, for its subsidiary Hindustan Zinc Ltd. in the current quarter, which will enable the latter to achieve 1.2 million tonne per annum refined metal production. The company also plans to complete the Gamsberg Phase 2 project in the second half of the current financial year, which will increase the operational mine capacity of Vedanta Zinc International to 525,000 tonnes per annum. The Gamsberg zinc mine is located in South Africa's Northern Cape province. The mine is part of Vedanta Zinc International's Black Mountain mining operations.
The management also said the Sijimali bauxite mine in Odisha is expected to start production by the end of the March quarter, with the company expecting to get environmental clearance by the end of the current quarter. The mine is expected to contribute 1.0-1.5 million tonnes of bauxite this year. According to the management, the company has initiated the process of clearances, including Forest Clearance 1 and Forest Clearance 2, and expects to have all the required approvals within the next 3-4 months.
As for its coal mines, the management said the company has received Forest Clearance 1 and environmental clearance and is targeting the second forest clearance by the end of the quarter. If that happens, it expects to start production in the December quarter. The mining plan has been approved and the company has received 300 acres of government land, which is about 41% of the required land, it said. The company is working to obtain the necessary clearances and approvals to start production, the management said.
Vedanta beat analysts' estimates on both consolidated net profit and revenue for the June quarter. Its bottom line rose, tracking better-than-expected revenue performance. Growth in the top line was driven by revenue growth in aluminium, copper, iron ore, power, and international zinc segments. Revenue from the Indian zinc, lead, and oil and gas segments declined.
Vedanta reported a fall of nearly 12% on year in consolidated net profit to INR 31.85 billion, but the net profit was higher than analysts' estimate of INR 29.72 billion. The consolidated revenue rose 5.8% on year to INR 378.24 billion, which was also above the Street view of INR 363.59 billion. Shares of Vedanta ended 2% lower at INR 425.65 on the National Stock Exchange. End
Edited by Rajeev Pai
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