Vedanta Aluminium profit jumps 216% YoY in Q1 as margins expand, production hits record

Vedanta Aluminium Metal Ltd. reported a sharp rise in first-quarter earnings, with profit attributable to owners more than tripling as robust aluminium prices, record production and cost efficiencies drove a significant expansion in operating margins despite a relatively moderate increase in revenue.

Profit attributable to owners of the company surged 216% year-on-year to ₹5,629 crore for the quarter ended June 30, from ₹1,781 crore a year earlier. Revenue from operations, including other operating income, rose 46% to ₹21,393 crore, while operational EBITDA climbed 134.8% to ₹10,299 crore. Operational EBITDA margin expanded to 48.14% from 29.93% in the corresponding quarter last year.

The board also approved the company's maiden interim dividend of ₹8 per equity share following its listing after the demerger from Vedanta Ltd.

Margin expansion drives earnings

The strong earnings were driven primarily by a sharp improvement in profitability rather than revenue growth alone. Profit before tax more than tripled to ₹8,832 crore, while finance costs remained largely unchanged at ₹1,001 crore, allowing much of the improvement in operating performance to flow through to the bottom line.

In its investor presentation, the company attributed the performance to higher volumes and metal realizations, favourable market conditions, improved cost efficiencies and a richer mix of value-added products, which more than offset input commodity inflation.

"Our inaugural quarter as an independent company marks a strong start, with record revenue at ₹21,105 crore, EBITDA at ₹10,499 crore, and PAT at ₹6,597 crore. We enter this phase from a position of robust financials, with a strengthened balance sheet and improved credit profile, offering increased flexibility for our strategic growth ambitions," said Anup Agarwal, Chief Financial Officer, Vedanta Aluminium.

Record production, stronger balance sheet

Operationally, the company achieved its highest-ever quarterly aluminium production of 632 kilotonnes, up 5% year-on-year, while value-added products output reached a record 389 kilotonnes, reflecting continued focus on higher-margin offerings. Alumina production rose 41% year-on-year to 826 kilotonnes, aided by higher refining capacity and improved asset utilisation.

Vedanta Aluminium also strengthened its balance sheet during the quarter. Net debt-to-EBITDA improved to 0.9 times from 1.3 times in the previous quarter, while both CRISIL and ICRA upgraded the company's credit rating to AA+ with a stable outlook.

Commenting on the quarter, Rajesh Kumar, Whole-Time Director and CEO, Vedanta Aluminium, said the company's performance reflected disciplined execution amid a volatile global environment.

"We have commenced our new, independent chapter with robust operational and financial performance in this quarter, reflecting the success of our approach which merges business resilience, disciplined execution, and a long-term vision. In an increasingly dynamic geopolitical environment, our strategic focus on resource security, operational integration, and value-added products continues to strengthen our competitive position while enhancing our ability to deliver sustainable growth," Kumar said.

Separately, the company approved definitive agreements with Serentica Renewable India 9 Pvt. Ltd. to integrate a 150 MW battery energy storage system into its existing 600 MW renewable power arrangement. Vedanta Aluminium will invest ₹165 crore under the group captive structure as part of its decarbonisation strategy and efforts to secure round-the-clock renewable power supply.