Diversified Metals Archives

VEDL – Vedanta Ltd – Q4 FY26 Earnings Call – 29-Apr-26

VEDL’s topline growth hinges on volume ramp-ups (Gamsberg, BALCO) and commodity prices; margins depend on cost controls (alumina, copper) and de-merger execution; bottomline resilience tied to debt servicing and dividend flexibility.

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Also see: VEDL – Vedanta Ltd – Q4 FY26 Financial Results – 29-Apr-26

3-Scenario Framework

📊 Base Case (60% Probability)

Key Variables: Athena Unit 1 restarts in H2 FY27, Gamsberg Phase 2 hits 4.5L tons by FY28, zinc prices average $2,800–3,000/ton.
Outcome: EBITDA grows 10–12% YoY (driven by aluminium, zinc, power). De-merger unlocks 15–20% valuation premium for pure-plays. Net debt/EBITDA remains <1x; dividend yield stabilizes at ~4%.

VEDL – Vedanta Ltd – Q4 FY26 Financial Results – 29-Apr-26

Vedanta’s FY26 marks an earnings inflection: 32%+ EBITDA margins, Q4 PAT nearly doubled, and debt metrics improved. Demerger unlocks value but adds charges and discontinuity. Dividend‑heavy policy, rising capex, and WC deterioration heighten risk; sustainability hinges on execution, NCI drag, and tax escalation.

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🔍 Observations

Topline

Combined (continuing + discontinued) revenue surged to ₹1,74,075 Cr in FY26 vs ₹1,50,725 Cr in FY25 — a 15.5% YoY jump driven by Copper (+34.8%), Silver (+60.8%), and Aluminium (+12.5%) segments.
Q4 FY26 total segment revenue hit ₹52,011 Cr vs ₹40,284 Cr in Q4 FY25 (+29.1% YoY), with sequential growth of 12.6% over Q3 FY26 — acceleration is broad-based, not segment-specific.
Copper segment revenue crossed ₹31,069 Cr in FY26 (up from ₹23,051 Cr), making it the second-largest revenue contributor among continuing operations.

Bottomline

Total net profit after tax rose to ₹25,096 Cr in FY26 vs ₹20,535 Cr in FY25 (+22.2% YoY); profit attributable to Vedanta owners grew from ₹14,988 Cr to ₹17,391 Cr (+16.0%).
Q4 FY26 PAT of ₹9,352 Cr nearly doubled Q4 FY25’s ₹4,961 Cr (+88.5%), the sharpest quarterly jump in the dataset — driven equally by continuing (₹4,250 Cr) and discontinued (₹5,102 Cr) operations.
Finance costs fell sharply — from ₹4,197 Cr (FY25) to ₹2,817 Cr (FY26) for continuing operations alone (-32.9%) — directly amplifying bottom-line growth.

Margins

Combined EBITDA margin: Total EBITDA ₹55,976 Cr on total revenue ₹1,74,075 Cr = 32.2% EBITDA margin in FY26 vs ₹43,541 Cr / ₹1,50,725 Cr = 28.9% in FY25 — 330 bps expansion.
Continuing ops operating profit margin improved from 21% (Q4 FY25) to 32% (Q4 FY26), per disclosed ratios — highest in the trailing five quarters shown.
Net profit margin (continuing ops basis per disclosed ratios): 16% in FY26 vs 13% in FY25 — 300 bps improvement, with Q4 FY26 at 21%.

Growth Trajectory

Total EPS (basic) grew from ₹38.97 (FY25) to ₹44.58 (FY26) — 14.4% YoY; Q4 FY26 EPS of ₹17.15 vs ₹8.92 in Q4 FY25 implies annualised run-rate well above FY26 full-year figure.
Aluminium EBITDA surged from ₹17,798 Cr to ₹25,502 Cr (+43.3% YoY) — single largest earnings driver, supporting demerger value unlock thesis.
Silver segment EBITDA and revenue are scaling disproportionately fast (revenue +60.8% YoY), suggesting a structural ramp-up rather than commodity price tailwinds alone.

VEDL – Q3 FY26 Earnings Call – 29-Jan-26

VEDL’s topline resilience (volume-led) and margin expansion (cost leadership) are structurally supported, but execution risks (project delays, commodity volatility) and balance sheet leverage (VRL maturities) introduce asymmetric downside—monitor ASP commissioning and BALCO ramp-up as near-term catalysts.

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3-Scenario Framework

📊 Base Case (50% Probability)

Key Variables: ASP commissioning (Q1 FY27), aluminum LME at $2,700/ton, and BALCO ramp-up on schedule.
Outcome: EBITDA hits $6.1–6.3B; aluminum/power drive 40%+ margins. Deleveraging accelerates (0.9x net debt/EBITDA); 10–12GW power expansion secures PPAs. Zinc International costs stabilize at $1,150/ton; HZL OFS proceeds (₹3,000 crore) reduce VRL debt by $300M.