Title: Vedanta Q4 FY25: Aluminium, Zinc, and Steel Output Hit Record Highs Amid Oil & Gas Dip – Key Highlights and Market Impact
Content:
Vedanta Ltd reported robust growth across key segments in Q4 FY25, achieving record production in aluminium, zinc, iron ore, and steel. However, oil and gas output declined, reflecting sector-specific challenges. Below is a detailed breakdown of the results and their market implications.
Key Production Highlights
Aluminium
- Annual Output: 2,421 kt (+2% YoY)[1].
- Q4 Production: 603,000 tonnes (+1% YoY), supported by improved operational efficiency[5].
- Alumina Production: Rose 9% annually, though Q4 faced temporary supply chain disruptions[1].
Zinc Operations
- Zinc India: Mined metal production rose 4% YoY to 310,000 tonnes in Q4, driven by higher grades and recoveries[5].
- Zinc International: Mined metal surged 52% YoY (50,000 tonnes), led by Gamsberg’s 89% YoY output jump[1][5].
- Annual Refined Zinc: 1,052 kt (+2% YoY)[1].
Iron Ore & Steel
- Iron Ore Production: 2.1 million tonnes in Q4 (+22% YoY)[5].
- Steel Output: Total saleable production climbed 4% YoY, driven by higher hot metal output and operational efficiencies[5].
- Pig Iron: Achieved record production with 4% YoY growth[1].
Copper Cathode
- Q4 Output: 44,000 tonnes (+41% YoY)[5].
- Annual Growth: 6% rise in production, reflecting improved capacity utilization[1].
Oil & Gas
- Average Daily Production: Dropped 18% YoY to 96,200 boepd (barrels of oil equivalent per day)[5].
- Annual Average: 103.2 kboepd across assets, with Q4 output at 3.5 kboepd from new Jaya discoveries[1][5].
Despite operational gains, Vedanta’s shares fell ~8% intraday on April 4, 2025, closing at ₹403.50[3]. Analysts attribute this dip to broader sectoral headwinds:
- Nifty Metal Index Decline: Fell ~4% amid global demand concerns and tariff uncertainties[3][2].
- Investor Sentiment: Mixed reactions to Vedanta’s $20 billion expansion plan and ongoing demerger process[3].
Strategic Moves: Demerger and Expansion
Vedanta is undergoing a five-way vertical split to unlock shareholder value, targeting completion by September 2025[3]:
- Verticals: Aluminium, Oil & Gas, Power, Steel & Ferrous, and Base Metals.
- Funding: ₹30,000 crore earmarked through internal accruals and placements[3].
- Growth Focus: Ramp-up in aluminium smelting, zinc refining, and steel capacity[1][5].
Industry Outlook and Challenges
- Lower Costs: Reduced coking coal prices benefiting EBITDA margins for Tata Steel and SAIL[2].
- Steel Demand: HRC prices down 11% YoY, but volumes offsetting realization pressures[2].
- Aluminium Prices: LME trends show resilience, boosting Novelis (Hindalco) and Vedanta[2].
- Zinc Challenges: Lower LME prices and tariff risks impacting margins[2].
Oil & Gas
- Declining Output: Vedanta’s production drop aligns with aging fields and delayed project timelines[5].
- Global Factors: Geopolitical risks and OPEC+ supply cuts influencing energy markets[3].
Expert Predictions for FY26
- EBITDA Growth: ICICI Securities forecasts improved spreads for Vedanta’s zinc and aluminium units[2].
- Debt Reduction: SAIL and Tata Steel likely to lower leverage through working capital optimization[2].
- Copper Demand: Rising EV and infrastructure needs to drive cathode production[1][5].
Conclusion: A Mixed Bag with Long-Term Potential
Vedanta’s Q4 FY25 results highlight operational resilience in metals and mining, offset by energy segment volatility. While investor concerns around tariffs and demerger delays persist, the company’s expansion plans position it as a key player in India’s push for self-reliance in critical minerals.
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