Decoding Vedanta’s FY26: Aluminium and energy seal milestone in pre-demerger wave

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Vedanta Limited delivered its strongest-ever financial performance in FY26, propelled by record earnings across its core businesses, particularly the segments of Aluminium, Oil & Gas and Power. Higher commodity and LME aluminium prices, operational optimisation, production ramp-ups and robust volumes helped the diversified natural resources major report historic highs in revenue, EBITDA and profit after tax, while also strengthening its balance sheet ahead of the company’s demerger that became effective from May 1, 2026.

FY26: Financials snapshot

Vedanta posted strong financial figures for the year as well as the January-March quarter (Q4), representing significant gains year-on-year over the financial outcome of FY25.

Annual revenue of INR 1,740.75 billion (USD 18.27 billion) for FY26 marked a 15 per cent Y-o-Y increase from INR 1,507.25 billion (USD 15.82 billion) in FY25.

EBITDA totalled a record INR 559.76 billion (USD 5.87 billion), climbing 29 per cent Y-o-Y from INR 435.41 billion (USD 5.19 billion) in FY25.

Profit after tax (PAT) recorded an all-time high of INR 250.96 billion (USD 2.63 billion), rising 22 per cent Y-o-Y from INR 205.35 billion (USD 2.45 billion) in FY25. 

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During Q4 alone, Vedanta posted remarkable outcomes as follows:

Quarterly revenue of INR 515.24 billion (USD 5.41 billion).

It shot up 12.26 per cent quarter-on-quarter (Q-o-Q) from INR 458.99 billion (USD 4.82 billion) in Q3 FY26 and 29 per cent Y-o-Y from INR 397.89 billion (USD 4.74 billion) in Q4 FY25.

Q4 EBITDA reached INR 184.47 billion (USD 1.94 billion).

This surged 21.59 per cent Q-o-Q from INR 151.71 billion (USD 1.59 billion) in Q3 FY26 and 59 per cent over INR 116.18 billion (USD 1.4 billion) in Q4 FY25.

Q4 PAT jumped to INR 93.52 billion (USD 981.5 million).

The figure soared by 19.79 per cent Q-o-Q from INR 78.07 billion (USD 819.36 million) in Q3 FY26 and 89 per cent from INR 49.6 billion (USD 591.5 million) in Q4 FY25.

Vedanta noted that the sharp improvement in profitability was driven by the surge in LME aluminium prices, improved premiums, stronger volumes and favourable forex movements. EBITDA margin for Q4FY26 expanded to around 44 per cent, improving by 915 basis points over the previous year.

Aluminium segment anchors growth

Vedanta Aluminium achieved record annual aluminium production during the year, going up 1 per cent Y-o-Y, driven primarily by operational efficiencies.

Production at the Lanjigarh alumina refinery jumped 48 per cent Y-o-Y, reaching a record annual level with an exit run-rate of 4 million tonnes per annum (MTPA). Vedanta also reported its lowest aluminium cost of production (COP) in five years at USD 1,752 per tonne, reflecting improved operational discipline and supply chain integration.  

Executive Director Arun Misra said, “We delivered 2.9 million tonnes of alumina, 2.46 million tonnes of aluminium,” during FY26, while simultaneously commissioning key growth projects across the aluminium segment. These included expansions of the “Lanjigarh Train II, the new Bharat Aluminium Company (BALCO) smelter, downstream expansions at Jharsuguda,” and so on. As the Lanjigarh expansion added 5 MTPA around Q1 FY26, the Jharsuguda aluminium park was expanding in Q2, and BALCO’s upgraded capacity reached 1 MTPA in Q3.

The company allocated a significant portion of its FY26 capital expenditure towards aluminium expansion, cost optimisation and backward integration initiatives. Total growth capex for the year stood at INR 149.18 billion (USD 1.57 billion).  

Vedanta Aluminium also strengthened its ESG profile during the year. The business secured the second rank globally in the S&P Corporate Sustainability Assessment for the third consecutive year. Additionally, the Jharsuguda facility received the Indian Manufacturer of the Year award by Frost and Sullivan.

Oil & Gas business maintains stable production

Vedanta’s Oil & Gas segment, operated through Cairn Oil & Gas, maintained relatively stable production during FY26 despite global energy market volatility.

Average gross operated production for the full year stood at 87.2 thousand barrels of oil equivalent per day (kboepd). The company also announced a gas discovery at the Ambe Block in India’s West Coast region, estimated to add around 13 million barrels of oil equivalent (mmboe) of reserves and resources.  

Cairn Oil & Gas also strengthened its sustainability credentials during the year. In its first-ever participation in the S&P Corporate Sustainability Assessment, the business ranked among the top five companies globally in the Oil & Gas Upstream and Integrated sector and emerged as the highest scorer from India. 

Also read: Vedanta secures S&P Global’s 'BB' upgrade as aluminium integration boosts margins

Vedanta Power supports operational integration

During FY26, Vedanta commissioned around 1.3 GW of power capacity as part of its broader expansion strategy across metals and mining operations.

TSPL recorded plant availability of 83 per cent during FY26, depicting stable operational performance.

Close to Q1, the segment also secured a five-year, 500 MW power purchase agreement (PPA) for the Meenakshi and Athena projects, bolstering its long-term power supply portfolio.  

Moreover, Vedanta awarded an integrated services contract worth INR 8.65 billion (USD 90.78 million) to Asian Energy Services at the start of Q3 for operations in its Oil & Gas segment. The multi-year contract covers field development and production support activities, reinforcing Vedanta’s push to enhance upstream output and operational efficiency across its energy assets.

The company’s sustainability initiatives within the power business also received industry recognition. TSPL won the Water Efficient Award at the CEE Power Generation & Water Management Summit 2026 along with the Biomass Co-firing Excellence & Reducing NSHR Award by Mission Energy Foundation during FY26.  

Balance sheet strengthens ahead of demerger

Vedanta’s balance sheet improved significantly during FY26, reinforced by stronger cash generation and disciplined capital management.

Free cash flow before capex stood at INR 260.13 billion (USD 2.73 billion) for the year, while cash and cash equivalents rose 38 per cent Y-o-Y to INR 284.85 billion (USD 2.99 billion). Net debt-to-EBITDA improved to 0.95x from 1.22x a year earlier, marking the company’s strongest leverage position in the last 14 quarters.

Gross debt as of March 31, 2026 stood at INR 81,740 crore, while net debt was reported at INR 532.54 billion (USD 5.59 billion). Both CRISIL and ICRA reaffirmed Vedanta’s credit rating at AA/Watch with Developing Implications.

Vedanta paid a total dividend of INR 34 per share during FY26, including INR 11 (USD 0.12) per share in Q4. The company’s total shareholder return during the year stood at 48.6 per cent, more than double the Nifty Metal Index performance. 

CFO mentions the demerger anticipation

Commenting on the results, CFO Ajay Goel observed, “The quarter marks a defining point for Vedanta, with the delivery of our strongest-ever financial performance recording all-time highs in Revenue, EBITDA, and PAT for both the quarter and the full year and a clear positioning for the next phase of growth with Demerger effective from 1st of May ‘26.”

Following the completion of the demerger, Vedanta has drawn up expansion plans across its major business segments, including aluminium, energy, oil and gas, indicating a sharper focus on capacity growth, operational scale-up and sector-specific value creation.  

Also read: Vedanta awards ₹285.8 million alumina transport wagon contract to Texmaco Rail

How has Vedanta’s stock fared through FY26?

Vedanta’s stock trend through FY25 and early FY26 reflected rising investor confidence, supported by stronger aluminium and zinc prices, improving EBITDA, deleveraging and the company’s demerger strategy to unlock value optimisation.

Brokerage targets moved sharply higher over the period, from around INR 470-550 (USD 4.94-5.78) in mid-to-late 2025 to INR 780-965 (USD 8.19-10.14) by early 2026. Analysts highlighted aluminium as Vedanta’s key earnings driver, contributing nearly 50 per cent of EBITDA, while energy, silver, and zinc segments also improved outlook expectations.

Several brokerages projected continued upside backed by commodity price strength, expansion plans, healthier cash flows and expectations of lower debt over FY26-FY28.

Stepping into FY27

Despite a minor slip, Vedanta’s stock continued to trade near its 52-week high, indicating optimism around higher global aluminium prices, supply disruptions owing to the Middle East conflict, capacity expansion and Vedanta Aluminium’s position as one of the world’s lowest-cost producers, affirming its foundation in FY27.

With strong momentum across aluminium, energy and natural resources, Vedanta enters FY27 focused on capacity expansion, operational efficiency and supply chain integration, while the demerger is expected to unlock value across its diversified business portfolio.

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