In This Article:
Release Date: January 31, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Vedanta Ltd (BOM:500295) reported a record third-quarter EBITDA of INR 11,284 crore, marking a 30% year-on-year increase.
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The aluminum business achieved its highest-ever quarterly and nine-month production, with significant increases in value-added products and domestic sales.
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The company has made substantial progress in sustainability, with high rankings in the S&P Global Corporate Sustainability Assessment.
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Vedanta Ltd (BOM:500295) has successfully doubled its rolled product capacity, becoming the second-largest producer in India.
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Significant improvements in the zinc international business, with the lowest quarterly cost of production in seven years.
Negative Points
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Natural decline in oil and gas fields continues, with production challenges despite ongoing initiatives.
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The company faces operational challenges in its aluminum business, including unplanned outages affecting production rates.
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Debt levels remain a concern, with a net debt of INR 57,000 crore, although improvements have been noted.
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The company is still working through geotechnical challenges in its zinc international operations, impacting production.
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There are ongoing issues with alumina cost increases due to higher imported bauxite costs.
Q & A Highlights
Q: Can you provide an update on the commissioning timelines for the bauxite and coal mines? Are there any changes from the previous quarter's guidance? A: The timelines for the bauxite and coal mines remain unchanged. We are looking at commissioning in Q4 FY26 for the bauxite mine, and Q1 FY26 for the coal mine. (Respondent: Executive Director)
Q: What contributed to the reduction in hot metal costs, and are there further levers to reduce costs in the coming quarters? A: The reduction in hot metal costs was primarily due to improved efficiencies in power and better plant performance. We expect further cost reductions of $30-$40 per ton through operational efficiencies and ramping up our captive coal blocks. (Respondent: CFO, Aluminum Business)
Q: When can we expect to see an increase in oil production, given the current decline? A: We anticipate seeing benefits from the ASP injection project in H1 FY26, which should help stabilize and potentially increase production. We are also working on infill opportunities to manage the current decline. (Respondent: CEO, Oil and Gas Business)
Q: How sustainable is the recent decline in costs for Zinc International, and what are the key drivers? A: The recent cost decline is partly sustainable, with expected costs to range between $1,200 and $1,300 per ton. This is due to increased stripping rates and resolving geotechnical challenges. We expect continued improvement in production and cost efficiency. (Respondent: CEO, Base Metals)