Vedanta plans up to $1.7 billion capex, bulk goes to aluminium

Vedanta plans to incur capital expenditure of $1.5-1.7 billion in this financial year, up from $1.5 billion in the previous fiscal, chief financial officer Ajay Goel said.

The funds will be spent across the aluminium, power, zinc and oil and gas business, with up to $700 million earmarked for the aluminium and power business, and $400-450 million for the zinc business.

“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,” Goel told ET.

Vedanta’s net debt stood at Rs 53,521 crore at the end of the March quarter, down from Rs 57,358 crore a year ago, while its net debt to EBITDA ratio improved to 1.2 times from 1.5 times a year ago.

The company expects its earnings before interest, tax, depreciation and amortisation (EBITDA) to increase 20% year-on-year in this fiscal as its ramps up volume and brings down costs of production further, Goel said.

“We are looking at 10% higher volume, and 10% lower cost in the current year,” he said. “So, that will be about 20% higher profitability driven by operations.”

In 2024-25, Vedanta’s consolidated EBITDA increased 37% yearon-year to Rs 43,541 crore, its secondhighest ever. The year also saw record production volume for both aluminium and zinc, while revenue surged to an all-time high of Rs 1.51 lakh crore. Its cost of production for zinc was at a four-year low in 2024-25.

Vedanta has operations across aluminium, zinc, power, oil and gas and steel segments. It is currently in the last leg of capacity expansion in several of these businesses, with additional capacity expected to come on board during the year.

“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,” said Arun Misra, executive director, Vedanta.

Apart from the expansion of the smelter at Bharat Aluminium Company, Vedanta’s steel facility will complete expansion to have a capacity of 3 million tonnes, while the Lanjigarh alumina refinery will now be 5 million tonnes, Misra said.

Vedanta’s subsidiary Hindustan Zinc also plans to expand its production capacity – to 2 million tonnes from 1.15 million tonnes currently.