FY25 to be transformative year: Vedanta’s Agarwal

VEDANTA IS PRIORITISING DISCIPLINED GROWTH WHILE PARENT EYES $3 BN DELEVERAGING IN THE NEXT 3 YEARS

Mining tycoon Anil Agarwal has said the current financial year that started on April 1 will be a transformative year for his conglomerate Vedanta as it prioritises disciplined growth while parent eyes a $3 billion deleveraging in the next three years.

In a communication to shareholders, Vedanta Ltd chairman Anil Agarwal said the group will pursue sustainable growth while maintaining a healthy balance sheet.

“These include further deleveraging (parent) Vedanta Resources by $3 billion in the next 3 years and achieving an annual group Ebitda of $7.5 billion within 2 years,” he said. “FY25 will be a transformative year for us on many fronts as we prioritise disciplined growth, operational excellence, and exploring opportunities along the value chain,” he said.

Vedanta had previously stated that it will invest $6 billion across businesses that span from aluminium and zinc to iron ore, steel and oil and gas, which is expected to generate incremental revenue of over $6 billion and boost Ebidta from an expected $5 billion in the fiscal year ended March 31 to $6 billion in 2024-25 (FY25) and up to $7.5 billion by FY26.

“Our strategy is clear, our foundation is solid, and our team is energised to achieve the targets we have set for ourselves,” Agarwal said.

Reflecting on the operational performance in the fiscal year ended March 31, he said Vedanta achieved the highestever annual aluminium production of 2.37 million tonnes (mt) of aluminum with lower cost of production and increased margins. “This success is underpinned by our ongoing vertical integration efforts, solidified by the expansion of the Lanjigarh refinery (now 3.5 million tonnes per annum capacity) and ramp up of captive coal mines,” he said. Lanjigarh refinery is being expanded to 5 million tonnes.

Hindustan Zinc delivered its highest-ever annual mined metal production of 1.07 million tonnes. Operational efficiencies led to a 15% cost reduction in the last six quarters, he said.

While Vedanta Ltd’s net debt is being targeted to be cut to $9 billion by FY27 from $13 billion now, parent Vedanta Resources has de-leveraged its balance sheet by $3.5 billion in the last two years to bring down net debt to $6 billion.