Vedanta Reports Record Profits and Outlines Post-Demerger Strategy
Vedanta’s historic year, strong margins and deleveraging path: Management on post-demerger strategy, listing timeline and capital allocation
The Economic TimesImage: The Economic Times
Vedanta's management announced a successful fiscal year 2026, highlighting record profitability in its aluminium and zinc businesses. The company plans to implement a demerger effective May 1, with new entities expected to be listed by June. A focus on growth and deleveraging remains central to their strategy.
- 01Vedanta achieved record revenues, EBITDA, and profit after tax in FY26.
- 02The demerger will take effect on May 1, with listings anticipated between June 15 and June 30.
- 03Debt allocation post-demerger will align with each entity's cash flow and capital needs.
- 04Vedanta aims to maintain a growth-led capital allocation strategy with high shareholder returns.
- 05The company has reduced its debt significantly, from $9 billion to under $5 billion over three years.
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Vedanta's management reported a landmark fiscal year 2026, with record financial performance across its aluminium and zinc sectors. CFO Ajay Goel noted that all key financial metrics, including revenue, EBITDA, and profit after tax, reached historic highs, driven by increased production and lower costs. The company will implement its long-awaited demerger on May 1, with new entities expected to be listed and trading by the end of June. Debt allocation will be strategically aligned with each unit's cash flow, ensuring a manageable debt-EBITDA ratio across the board. Vedanta's capital allocation will continue to prioritize growth investments, operational improvements, and maintenance capex, with a commitment to high shareholder returns. The management also emphasized a clear deleveraging path, projecting a reduction in Vedanta Resources' debt from $9 billion to $3 billion over the next three years. While there are no immediate plans for asset divestment, the company may explore new capital structures post-demerger to attract global investors.
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Vedanta's restructuring and demerger may enhance operational efficiency and attract investment, potentially benefiting local economies dependent on its operations.
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