Indian conglomerate Vedanta, spanning metals to oil has announced plans to increase its capital expenditure for the current financial year. As per Chief Financial Officer Ajay Goel, Vedanta plans to increase it between $1.5 billion and $1.7 billion, up from $1.5 billion in the previous fiscal.
The majority of the investment of around $700 million is expected to be allocated to aluminium and power business, followed by $400–$450 million set aside for the zinc division.
"With our augmented volume base, with our compressed cost base, our operating free cash flows will be sufficient to fund the growth and, at the same time, leave money for deleveraging both Vedanta India and Vedanta Resources. We are looking at 10 per cent higher volume, and 10 per cent lower cost in the current year. So, that will be about 20 per cent higher profitability driven by operations." added Goel.
Vedanta's net debt stood at INR 53,521 crore at the end of the March quarter, down from INR 57,358 crore a year earlier. Its net debt-to-EBITDA ratio also improved to 1.2 times, compared to 1.5 times the previous year. CFO Ajay Goel stated that the company expects its EBITDA to grow by 20 per cent year-on-year in the current fiscal, driven by increased production volumes and continued efforts to reduce production costs.
In FY 2024–25, Vedanta's consolidated EBITDA rose by 37 per cent year-on-year to INR 43,541 crore, marking its second-highest level to date. The company achieved record production volumes in both aluminium and zinc, while revenue reached an all-time high of INR 1.51 lakh crore. Notably, zinc production costs fell to their lowest level in four years during the same period.
"Many of the strategic projects, which will affect further volume in zinc and aluminium, cut down costs in both the businesses and increase volumes in ESL. They will all come to fruition between quarter three and four of this year, and that will further boost our operational performances going into next year," stated Arun Misra, executive director of Vedanta.
Vedanta operates across aluminium, zinc, power, oil and gas, and steel segments. It is now in the final phase of capacity expansion in several of these areas, with new capacities expected to become operational within the year. In addition to expanding the smelter at Bharat Aluminium Company, Vedanta's steel plant is set to complete its expansion, reaching a capacity of 3 million tonnes, while the Lanjigarh alumina refinery will be scaled up to 5 million tonnes, according to Misra.
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