Vedanta Ltd:Annual Report 2023-24 Analysis

Vedanta Ltd.: A Comprehensive Overview #

About the Company #

Year of Establishment and Founding History:

Vedanta Limited was established in 1965 by Anil Agarwal as Sterlite Industries. Initially, it focused on importing scrap metal. Over time, it expanded into manufacturing copper rods and cables.

Headquarters Location and Global Presence:

• Headquarters: Mumbai, India
• Global Presence: Vedanta has operations in India, South Africa, Namibia, Ireland and Australia.

Company Vision and Mission:

While publicly stated vision and mission statements can vary and change, Vedanta historically has focused on sustainable growth and maximizing shareholder value by utilizing natural resources responsibly and contributing to the development of the communities where it operates.

Key Milestones in Their Growth Journey:

• 1993: Sterlite Copper smelter commissioned at Tuticorin, India.
• 2003: Acquisition of Hindustan Zinc Limited (HZL).
• 2007: Acquisition of Sesa Goa Limited.
• 2018: Vedanta Resources delisted from the London Stock Exchange.
• 2021: Announced plans to restructure the group structure.

Stock Exchange Listing Details and Market Capitalization:

• Stock Exchange: BSE (Bombay Stock Exchange), NSE (National Stock Exchange)
• Market Capitalization: (Information is dynamic, and varies. Refer to live market data sources.)

Recent Financial Performance Highlights:

(Information is dynamic, and varies. Refer to latest financial reports and investor presentations for updated figures.) Key metrics to look for include revenue, net profit, EBITDA, debt levels, and key operational performance indicators for each business segment (e.g., aluminum production, copper production, zinc production).

Management Team and Leadership Structure:

• (Information is dynamic. Refer to the company’s official website or annual reports for the most current information.) Typically, it includes the Chairman, CEO, CFO, and heads of various business units (Aluminum, Zinc, Copper, Oil & Gas, Iron Ore).

Notable Awards or Recognitions:

Vedanta and its various subsidiaries have received awards and recognition in areas such as:

• Sustainability
• Corporate Social Responsibility (CSR)
• Safety
• Operational Excellence

Their Products #

Complete Product Portfolio with Categories:

• Aluminum: Aluminum ingots, billets, wire rods, and rolled products.
• Zinc: Zinc ingots, zinc alloys, lead ingots, silver.
• Copper: Copper cathodes, copper rods, sulfuric acid, phosphoric acid.
• Oil & Gas: Crude oil, natural gas.
• Iron Ore: Iron ore lumps and fines.
• Steel: Pig Iron, Metallurgical Coke.
• Power: Thermal power.

Flagship or Signature Product Lines:

• Aluminum products from BALCO and Vedanta Aluminium.
• Zinc products from Hindustan Zinc Limited (HZL).
• Copper products from Sterlite Copper (currently facing operational challenges).

Key Technological Innovations or Patents:

Vedanta has focused on improving operational efficiency, enhancing resource utilization, and developing sustainable mining and processing practices. Specific details on patents would require searching patent databases related to Vedanta’s various business segments.

Manufacturing Facilities and Production Capacity:

• Aluminum: Smelters in Jharsuguda and Lanjigarh (Odisha), and Korba (Chhattisgarh).
• Zinc: Mines and smelters in Rajasthan.
• Copper: Smelter at Tuticorin (currently non-operational).
• Oil & Gas: Operations primarily in Rajasthan.
• Iron Ore: Operations primarily in Goa (subject to regulatory clearances).

Specific production capacities vary and are reported in company presentations and annual reports.

Quality Certifications and Standards:

Vedanta and its subsidiaries hold various quality certifications relevant to their respective industries, such as:

• ISO 9001 (Quality Management)
• ISO 14001 (Environmental Management)
• ISO 45001 (Occupational Health and Safety Management)

Any Unique Selling Propositions or Technological Advantages:

• Integrated operations across the value chain (e.g., from bauxite mining to aluminum production).
• Significant presence in the Indian market.
• Focus on resource optimization and cost efficiency.

Recent Product Launches or R&D Initiatives:

Recent initiatives likely focus on value-added products, sustainable mining practices, and technology upgrades to improve efficiency and reduce environmental impact. Refer to press releases and investor presentations for specifics.

Primary Customers #

Target Industries and Sectors:

• Aluminum: Automotive, construction, aerospace, packaging, electrical, and electronics.
• Zinc: Infrastructure, galvanizing, die-casting, batteries.
• Copper: Electrical, electronics, construction, telecommunications.
• Oil & Gas: Refineries, petrochemical plants, power generation.
• Iron Ore: Steel manufacturing.

Geographic Markets (domestic vs. international):

Vedanta has a significant presence in the Indian market. They also export products to various international markets.

Major Client Segments (agricultural, industrial, residential, etc.):

Primarily industrial, serving downstream manufacturing industries.

Distribution Network and Sales Channels:

Direct sales to major industrial customers, distributors, and trading partners.

Major Competitors #

Direct Competitors in India and Globally:

• Aluminum: Hindalco Industries (India), Rio Tinto, Alcoa, Rusal.
• Zinc: Hindustan Zinc (While HZL is a subsidiary of Vedanta, it operates with relative autonomy), Glencore, Teck Resources, Nyrstar.
• Copper: Hindalco Industries (India), Freeport-McMoRan, BHP, Codelco.
• Oil & Gas: ONGC, Reliance Industries, Cairn Oil & Gas (another subsidiary of Vedanta).

Competitive Advantages and Disadvantages:

• Advantages: Integrated operations, cost efficiency, access to resources, established presence in India.
• Disadvantages: Regulatory challenges, environmental concerns, commodity price volatility, social issues related to mining operations.

How they differentiate from competitors:

Vedanta emphasizes cost competitiveness, operational efficiency, and sustainable practices (although its sustainability record has been scrutinized).

Industry Challenges and Opportunities:

• Challenges: Commodity price volatility, environmental regulations, social license to operate, global economic slowdown.
• Opportunities: Growing demand for metals and energy in developing economies, infrastructure development, increasing focus on sustainability and circular economy.

Market Positioning Strategy:

Vedanta aims to be a leading diversified natural resources company with a focus on sustainable and responsible operations.

Future Outlook #

Expansion Plans or Growth Strategy:

Vedanta has expressed intentions to expand its production capacities across its various business segments, particularly in aluminum and zinc. They are also exploring opportunities in new areas such as electronics and renewable energy.

Upcoming Products or Innovations:

Focus is expected on value-added products, technology-driven efficiency improvements, and sustainable mining and processing techniques.

Sustainability Initiatives or ESG Commitments:

Vedanta has stated commitments to reduce its environmental footprint, improve community relations, and enhance corporate governance. Specific targets and initiatives are outlined in their sustainability reports.

Industry Trends Affecting Their Business:

• Global demand for metals and energy.
• Growing focus on sustainability and ESG investing.
• Technological advancements in mining and processing.
• Geopolitical factors and trade policies.

Long-term Vision and Strategic Goals:

Vedanta’s long-term vision is to be a leading diversified natural resources company that creates sustainable value for its stakeholders by responsibly utilizing natural resources and contributing to the development of the communities where it operates.

Comprehensive Performance Overview #

3-Year Trend Analysis of Key Financial Metrics #

• Revenue: FY22: ₹1,31,192 crore; FY23: ₹1,45,404 crore; FY24: ₹1,41,793 crore.
• EBITDA: FY22: ₹45,319 crore; FY23: ₹35,241 crore; FY24: ₹36,455 crore.
• EBITDA Margin (Adjusted): FY22: 39%; FY23: 28%; FY24: 30%.
• Return on Capital Employed (ROCE): FY22: 30%; FY23: 21%; FY24: ~23%.
• Net Debt/EBITDA: FY22: 0.5x; FY23: 1.3x; FY24: 1.5x.
• Free Cash Flow (FCF) post-capex: FY22: ₹ 21,715 crore, FY23: ₹18,077, FY24: ₹11,427 crore.
• EPS (before exceptional items): FY22: ₹39, FY23: ₹28.36, FY24: ₹21.40.

Business Segment Performance #

• Aluminium: FY24 EBITDA at ₹9,657 crore, up 67% Y-o-Y, driven by cost reduction. Seven consecutive quarters of aggressive cost reduction drove down the cost of production (COP) by US$ 942 per tonne to US$ 1,711 per tonne in Q4 FY 2023-24.
• Zinc India: FY24 EBITDA was ₹13,562 crore. Sustained cost reduction efforts over five consecutive quarters led to a US$ 242 per tonne decline in COP to US$ 1,051 per tonne in Q4 FY 2023-24. The average COP for FY 2023-24 was US$ 1,117 per tonne.
• Zinc International: FY24 EBITDA was ₹693 crore.
• Oil & Gas: FY24 EBITDA was ₹9,777 crore with an OPEX of US$13.9/boe.
• Iron Ore: FY24 EBITDA was ₹1,676 crore.
• Steel: FY24 EBITDA was ₹225 crore.
• Power: FY24 EBITDA was ₹971 crore.
• Ferro Alloys: FY24 EBITDA was ₹115 crore.
• Copper India: FY24 Cathode production from Silvassa was 141 kt.

Major Strategic Initiatives and Their Progress #

• Demerger: Proposed demerger into six independent pure-play companies is progressing; obtained a No-Objection Certificate (NOC) from the stock exchange and awaiting SEBI’s NOC.
• Aluminium: 1.5 MTPA Train-I of Lanjigarh refinery capacity expansion was commissioned, reaching 3.5 MTPA, with Train-II of another 1.5 MTPA capacity scheduled for Q2 FY 2024-25. Debottlenecking exercise is underway to achieve 6 MTPA alumina refinery capacity by FY 2025-26. Ongoing 1 MTPA expansion at BALCO to expand total smelting capacity to 3 MTPA, expected commissioning in H2 FY 2024-25. Ongoing efforts to secure 100% captive alumina, bauxite, and coal supplies. Sijimali bauxite mine development is progressing, with initial production expected in Q3 FY 2024-25. Jamkhani mine is producing at 100% of weighted capacity, and Kurloi, Ghogharpalli and Radhikapur mines are poised for commissioning within the next 9 -12 months.
• Zinc India: Successful commissioning of the Fumer plant and mill revamping. Progressing on track with the 160 KTPA Roaster Plant and 510 KTPA fertilizer plant.
• Zinc International: Gamsberg Phase 2 project, aimed to expand the MIC capacity to 500 KTPA, has achieved nearly 60% completion.
• Oil & Gas: Phase 1 of new recovery technologies is on track, with incremental production expected in Q1 FY 2024-25. Planned 10-well exploration campaign in Assam and mobilizing rigs to east and west coast assets for multi-year drilling programmes.
• Power: Unit 1 of the 150 MW Meenakshi Power Plant being synchronised, and financing secured for Athena.
• Iron Ore: Commissioning of Bicholim mines with 3 MTPA capacity, securing environment clearance for expanding IOK to 7.2 MTPA, and efforts to ramp-up operations in Liberia.
• Steel: On track to expand capacity to 3.5 MTPA in FY 2024-25.
• FACOR: Board has approved a capex of ` 2,650 crore for expanding ferrochrome capacity from 150 KTPA to 450 KTPA, targeting India’s largest ferrochrome producer status by FY 2026-27.
• Capex: FY24 capex investment was ₹12,267 crore (US$1.4 billion). A capex of US$1.9 billion is envisaged for FY 2024-25.

Risk Landscape Changes #

• Increased focus on regulatory compliance and ESG expectations, impacting operational costs and potentially leading to stricter enforcement of regulations.
• Geopolitical uncertainties are causing supply chain disruptions and impacting commodity prices.
• Transition risks related to climate change, including policy changes like Europe’s Carbon Border Adjusted Mechanism (CBAM).
• The Company experienced three fatalities in the FACOR and VAL-Jharsuguda businesses.

ESG Initiatives and Metrics #

Environmental #

• Ongoing construction of 838 MW of renewable energy round-the-clock (RE RTC).
• Water positivity ratio improved to 0.71 in FY24, with a 2.7% reduction in freshwater consumption.
• 92% of High-Volume Low-Toxicity (HVLT) waste recycled.
• Planted 2 million trees as part of a commitment to plant 7 million trees by 2030.
• GHG intensity of 5.66 tCO2e per tonne of metal.
• Avoided emissions of 6 million tCO2e from FY 2020-21 baseline.

Social #

• Total CSR spend of ₹438 crore.
• 17.4 million beneficiaries through CSR programmes.
• 6,076 Nand Ghars built.

Governance #

• Maintained transparent disclosures, aligning with international frameworks like GRI and TCFD.
• Women employees represent 20% of the total workforce.
• 36 transgender employees.

ESG Ratings #

• S&P Global Corporate Sustainability Assessment 2023: Vedanta ranked 3rd, HZL ranked 1st, Vedanta Aluminium ranked 1st in respective peer groups.

Management Outlook #

• FY 2024-25 is projected to be transformative, with the completion of most expansion projects.
• Focus on disciplined growth, operational excellence, and exploring value chain opportunities.
• Targets further deleveraging of Vedanta Resources by US$3 billion over the next three years.
• Expects the monetisation of steel and raw materials business to be completed in H1 FY 2024-25.
• Ongoing strategic initiatives in volume growth, backward integration, and value addition are expected to significantly enhance cost structure and EBITDA margins.
• Indian economy is expected to have rapid decadal growth, supporting sustained demand for commodities.
• Expectation of healthy economic growth at 8.6% CAGR during 2022-2030.

Detailed Analysis #

Segment-Wise Financial Analysis of Vedanta Limited #

Revenue Breakdown by Segment (FY 2023-24 vs. FY 2022-23) #

• Zinc India: Revenue decreased by 16% Y-o-Y, from C33,120 crore to C27,925 crore, due to lower zinc LME prices and zinc metal volume, partially offset by increased silver volumes and favorable exchange rates.
• Zinc International: Revenue decreased by 32% Y-o-Y, from C5,209 crore to C3,556 crore, primarily due to lower production volumes.
• Oil & Gas: Revenue increased by 19% Y-o-Y, from C15,038 crore to C17,837 crore, driven by a one-time arbitration award, partially offset by lower output commodity prices, primarily Brent prices.
• Aluminium: Revenue decreased by 8% Y-o-Y, from C52,662 crore to C48,371 crore, primarily driven by lower LME prices, partially offset by increased volume.
• Copper: Revenue increased, from C17,491 crore to C 19,730 crore.
• Iron Ore: Revenue increased by 39% Y-o-Y, from C6,503 crore to C9,069 crore, primarily due to higher sales volume at Karnataka and Value-Added Business (VAB).
• Steel: Revenue increased from C7,852 crore in FY23 to C8,300 crore in FY24.
• Power: Revenue decreased by 8%, from C6,724 crore to C6,153 crore.
• FACOR: Revenue increased by 5% Y-o-Y, from C 768 crore to C809 crore.

Revenue Breakdown by Geography (FY 2023-24 vs. FY 2022-23) #

• India: Revenue increased from C87,099 crore to C91,142 crore.
• Europe: Revenue decreased from C18,360 crore to C8,485 crore.
• China: Revenue increased from C5,296 crore to C5,306 crore.
• Mexico: Revenue decreased from C4,619 crore to C1,562 crore.
• Others: Revenue increased from C26,191 crore to C32,956 crore.

Cost Structure Analysis #

• Cost of materials consumed: Decreased slightly from C44,470 crore in FY 2022-23 to C44,115 crore in FY 2023-24.
• Power and fuel charges: Decreased significantly from C30,950 crore in FY 2022-23 to C23,547 crore in FY 2023-24.
• Employee benefit expense: Increased from C3,098 crore in FY 2022-23 to C3,300 crore in FY 2023-24.
• Finance costs: Increased significantly from C6,225 crore in FY 2022-23 to C9,465 crore in FY 2023-24.
• Other expenses: Increased from C34,688 crore in FY 2022-23 to C37,275 crore in FY 2023-24.

Margin Analysis (FY 2023-24 vs. FY 2022-23) #

• Adjusted EBITDA Margin: Increased from 28% in FY 2022-23 to 30% in FY 2023-24, driven by cost efficiencies.
• Operating Profit Margin (EBIT less depreciation and amortization): Increased from 17% in FY 2022-23 to 18% in FY 2023-24, primarily due to higher EBITDA.
• Net Profit Margin (before exceptional items): Decreased from 10% in FY 2022-23 to 8% in FY 2023-24.
• Zinc India: EBITDA margin decreased from 53% to 49%
• Zinc International: EBITDA margin decreased from 37% to 19%
• Aluminium: EBITDA margin increased from 11% to 20%.
• Iron Ore: EBITDA margin increased from 15% to 18%
• Steel: EBITDA margin decreased from 4% to 3%.

Non-Recurring Items (FY 2023-24 vs. FY 2022-23) #

• FY 2023-24: Net exceptional gain of C2,803 crore, including impairment reversal in Oil & Gas, foreign currency translation gain on redemption of OCRPS, and liability written back in the power segment, offset by impairments in Copper, Aluminium, and Zinc International.
• FY 2022-23: Net exceptional loss of C(217) crore.

EPS Analysis (FY 2023-24 vs. FY 2022-23) #

• Basic EPS: Decreased from C28.50 per share to C11.42 per share.
• Diluted EPS: Decreased from C28.32 per share to C11.33 per share.
• Basic and Diluted EPS before exceptional items: Decreased from C 28.36 per share to C21.40 per share.

Cash Flow and Liquidity Analysis #

Operating, Investing, and Financing Cash Flow #

• Operating Cash Flow (OCF): Increased to C 35,654 crore in FY 2023-24 from C 33,065 crore in FY 2022-23.
• Investing Cash Flow (ICF): Outflow decreased to C 13,686 crore in FY 2023-24 from C 693 crore outflow in FY 2022-23.
• Proceeds from sale of short term investments: C 55,851 crore in FY24.
• Financing Cash Flow (FCF): Outflow of C 26,092 crore in FY 2023-24 compared to an outflow of C 34,142 crore in FY 2022-23.
• Repayment of short term borrowings (net): C 148 crore. Proceeds from current borrowings: C 10,770 crore. Interest paid: C 9,825 crore. Dividend paid: C 18,572 crore in FY24.
• Free Cash Flow (post-capex): C 11,427 crore in FY 2023-24, compared to C 18,077 crore in FY23.

Working Capital Management Efficiency #

• Debtors turnover ratio: 34.93 times
• Inventory turnover ratio: 7.52 times in FY 2023-24, compared to 7.51 times in FY 2022-23.

Capex Analysis by Segment (FY 2023-24) #

• Zinc India: C 3,530 crore.
• Zinc International: C 2,139 crore.
• Oil & Gas: C 3,217 crore.
• Aluminium: C 7,773 crore.
• Copper: C 104 crore.
• Iron Ore: C 621 crore.
• Power: C 1,364 crore.
• Steel: C 1,355 crore.
• Others: C 15 crore unallocable to any segment.
• Total Group Capex: C 12,267 crore.

Dividend and Share Buyback Trends #

• Dividend Declared (FY 2023-24): C 29.5 per share, with a total payout of C 18,572 crore.
• Dividend Yield (FY 2023-24): ~11%.
• 5-year average dividend yield: 17%.
• Share Buyback: No share buyback during FY 2023-24. A subsidiary bought back shares for C 1,389 crore.

Debt Service Coverage #

• Debt/EBITDA Ratio: 1.5x as of 31 March 2024, compared with 1.3x as on 31 March 2023.
• Interest Cover: ~4.79 times in FY 2023-24, lower Y-O-Y due to higher interest.

Liquidity Position and Cash Conversion Cycle #

• Cash and Cash Equivalents: C 15,421 crore, including cash and liquid investments.
• Current Ratio: 0.68 times.
• Operational buyers’ credit/ suppliers’ credit: Increased to C 14,935 crore in FY 2023-24.
• Gross Debt: Increased to C 71,759 crore as of 31 March 2024 from C 66,182 crore as of 31 March 2023.
• Net Debt: Increased to C 56,338 crore as of 31 March 2024 from C 45,260 as of 31 March 2023.

Free Cash Flow Yield Trends #

• FCF (post capex) of C 11,427 crore in FY 2023-24, compared to C 18,077 crore in FY23.

Financial Analysis: Key Performance Indicators #

Profitability Ratios (3-Year Trends) #

Aluminium #

• EBITDA Margin: FY22: 26%, FY23: 18%, FY24: 30%. Significant increase in FY24, driven by reduced cost of production.
• ROCE: Increased to ~23% in FY24, driven by increase in EBIT.

Zinc India #

• EBITDA Margin: FY22: 63%, FY23: 60%, FY24: 49%. Shows a declining trend due to lower output commodity prices, despite some cost reduction.
• ROCE: FY24 at ~23% indicates good profitability, although specific historical comparisons are not possible without prior ROCE figures.

Zinc International #

• EBITDA Margin: FY22: 36%, FY23: 37%, FY24: 19%. Sharp decline in profitability in FY24.

Oil & Gas #

• EBITDA Margin: FY22: 55%, FY23: 52%, FY24: 55%. Relatively stable, high profitability margins.

Iron Ore #

• EBITDA Margin: FY22: 26%, FY23: 17%, FY24: 27%. Shows improvement in FY24.

Steel #

• EBITDA Margin: FY22: 4%, FY23: 4%, FY24: 2%. Lower margin business with a decline noted.

Power #

• EBITDA Margin: FY22: 13%, FY23: 12%, FY24: 16%.Shows increase in margin.

Copper India #

• EBITDA Margin: Showed inconsistency due to the operational status of the Tuticorin smelter.

Ferro Alloys #

• EBITDA Margin: FY22:12%, FY23: 19%, FY24:14%.

Vedanta Limited (Consolidated) #

• Adjusted EBITDA Margin: FY22: 39%, FY23: 28%, FY24: 30%. Improved margin in FY24, driven by cost efficiencies.
• ROCE: 30%(FY22),21%(FY23),~23%(FY24), primarily due to increase in EBIT.
• ROA: 2023-24:5%, 2022-23:9%.

Liquidity Metrics #

Vedanta Limited (Consolidated) #

• Current Ratio: FY22: 1.0, FY23: 0.7, FY24: 0.7. Remains below 1, indicating potential short-term liquidity pressure, consistent over the three years.

Efficiency Ratios #

Vedanta Limited (Consolidated) #

• Debtors Turnover Ratio: FY22: 32.5, FY23: 31.8, FY24: 34.9.Consistent, showing only marginal variations.
• Inventory Turnover Ratio: FY22: 7.1, FY23: 7.5, FY24: 7.5. Slight improvement and remains relatively stable.

Leverage Metrics #

Vedanta Limited (Consolidated) #

• Net Debt/EBITDA: FY22: 0.5x, FY23: 1.3x, FY24: 1.5x. Increasing trend, indicating higher leverage.
• Interest Cover: FY22: 15.0, FY23: 8.2, FY24: 4.79. Decreasing trend, indicating lower ability to cover interest expenses.
• Debt Equity Ratio: FY22: 0.6, FY23: 1.3, FY24: 1.7. Significant increase in FY24 due to increase in gross debt.

Segment Performance Analysis #

Aluminium #

Revenue and Profitability #

• Revenue decreased by 8% Y-o-Y to ’ 48,371 crore.
• EBITDA increased by 67% Y-o-Y to ’ 9,657 crore.
• Adjusted EBITDA margin was at 30% in FY 2023-24, up from 28% the previous year.

Market Share and Competitive Position #

• Vedanta has a 45% market share among India’s primary aluminium producers.

Key Products/Services Performance #

• Highest-ever aluminium production at 2,370 kt, a 3% increase Y-o-Y.
• Alumina production was at 1,813 kt.
• Domestic sales were at a record 920 kt, up 19% Y-o-Y.

Geographic Distribution and Market Penetration #

• Operations are primarily India-focused, with the largest capacity in India and 9th largest globally.

Operational Efficiency Metrics #

• Aluminum Cost of Production (COP) decreased by 23% Y-o-Y to US$ 1,796 per tonne.

Growth Initiatives and Challenges #

• Ongoing projects include expansion of the Lanjigarh refinery, and operationalization of the captive coal blocks. These initiatives aim for vertical integration and cost reduction.

Zinc India #

Revenue and Profitability #

• Revenue was ’ 27,925 crore, down 16% Y-o-Y.
• EBITDA was ’ 13,562 crore, a decrease of 22% Y-o-Y.
• EBITDA margin was 49%.

Market Share and Competitive Position #

• Holds a 75% market share in India’s primary zinc market.
• Globally, it is among the largest fully integrated zinc-lead producers and the 3rd largest silver producer.

Key Products/Services Performance #

• Highest-ever mined metal production at 1,079 kt (up 2% Y-o-Y).
• Highest-ever refined zinc-lead production at 1,033 kt.
• Record silver production of 746 tonnes (up 5% Y-o-Y).

Geographic Distribution and Market Penetration #

• Operations primarily located in India (Debari, Chanderiya, Dariba, Rampura Agucha, Zawar, Rajpura, and Vizag).

Operational Efficiency Metrics #

• Five consecutive quarters of sustained cost reduction efforts led to US$ 1,051 per tonne COP in Q4 FY 2023-24.
• The average COP for FY 2023-24 was US$ 1,117 per tonne.

Growth Initiatives and Challenges #

• Ramp-up of underground mines, commissioning of new beneficiation and ZLD plants, and expansion of the Pantnagar Metal Plant.
• Waste management through jarosite utilisation.

Zinc International #

Revenue and Profitability #

• EBITDA was 693 crore.

Market Share and Competitive Position #

• The segment has R&R of more than 662 million tonnes.

Key Products/Services Performance #

• Mined metal production was 208 kt.

Geographic Distribution and Market Penetration #

• Operations in South Africa (Black Mountain Mine and Gamsberg) and Namibia (Skorpion Mine).

Operational Efficiency Metrics #

• Overall Zinc COP including TcRc was US$ 1,488 per tonne.

Growth Initiatives and Challenges #

• Lower ore mining.
• Ongoing Gamsberg Phase 2 project to expand MIC capacity.

Oil and Gas #

Revenue and Profitability #

• Revenue was’ 17,837 crore, up 19% Y-o-Y.
• EBITDA was ’ 9,777 crore, up 26% Y-o-Y.

Market Share and Competitive Position #

• Operates ~25% of India’s crude oil production.

Key Products/Services Performance #

• Average gross operated production was 128 Kboepd.

Geographic Distribution and Market Penetration #

• Operations in India (Mangala, Ravva, Cambay, KG Onshore & Offshore, other exploration assets).

Operational Efficiency Metrics #

• OPEX was US$ 13.9/boe.

Growth Initiatives and Challenges #

• Production ramp-up from Jaya discovery and submission of the country’s first field development plan for the OALP field Jaya.
• Infill drilling to mitigate natural decline.

Power #

Revenue and Profitability #

• EBITDA was ’ 971 crore, up by 6% year-on-year.

Market Share and Competitive Position #

• One of the largest power producers in India’s private sector.

Key Products/Services Performance #

• Overall power sales were 13,443 million units.

Geographic Distribution and Market Penetration #

• Power assets at TSPL (Talwandi Sabo), Jharsuguda, Korba & Lanjigarh, with upcoming thermal power plants in Andhra Pradesh and Chhattisgarh.

Growth Initiatives and Challenges #

• Upcoming Meenakshi and Athena thermal power plants to supply 5 GW of commercial power within the next two years.

Iron Ore #

Revenue and Profitability #

• EBITDA was ’ 1,676 crore, marking a 70% Y-o-Y increase.

Market Share and Competitive Position #

• One of the largest private sector exporters of iron ore in India, and one of the largest producers and exporters of merchant pig iron in India.

Key Products/Services Performance #

• Record annual saleable ore production from Karnataka mines at 5.6 million tonnes and Pig iron production at 831 kt, both up 19% Y-o-Y.

Geographic Distribution and Market Penetration #

• Operations in Karnataka and Goa.

Growth Initiatives and Challenges #

• Operationalisation of the Bicholim mine in Goa and plans for production ramp-up in Liberia.

Steel #

Revenue and Profitability #

• EBITDA was ’ 225 crore.

Key Products/Services Performance #

• Achieved highest-ever saleable production at 1.4 million tonnes, an 8% increase Y-o-Y.

Geographic Distribution and Market Penetration #

• Operations in Bokaro, India.

Growth Initiatives and Challenges #

• Capacity expansion to 3.5 MTPA planned for FY 2024-25.

Copper India #

Revenue and Profitability #

• The segment reported an EBITDA loss of C 69 crore.

Market Share and Competitive Position #

• One of the largest copper production capacities in India.

Key Products/Services Performance #

• Cathode production from Silvassa was 141 kt.

Geographic Distribution and Market Penetration #

• The Tuticorin smelter and refinery are currently not operational.
• Silvassa refinery capacity: 216 KTPA.

Growth Initiatives and Challenges #

• Tuticorin smelter is currently non-operational.

Ferro Alloys #

Revenue and Profitability #

• EBITDA was C 115 Crore.

Key Products/Services Performance #

• Record Ferrochrome production of 80 kt, an 18% Y-o-Y increase.

Geographic Distribution and Market Penetration #

• Osthpal mines and 45 MVA Charge chrome plant of 80 KTPA, 33 MVA Charge chrome plant of 65 KTPA and captive power plant of 100 MW.

Growth Initiatives and Challenges #

• Board approved a capex of C 2,650 crore for expanding ferrochrome capacity from 150 KTPA to 450 KTPA, aiming to become India’s largest ferrochrome producer by FY 2026-27.

Risk Assessment Framework #

Aluminium #

Strategic Risks #

• Severity: High
• Likelihood: Medium
• Trend: Increasing
• Mitigation Strategies: Focus on vertical integration, securing 100% captive alumina, bauxite, and coal supplies.
• Control Effectiveness: Partially effective, ongoing projects for vertical integration.
• Potential Financial Impact: Multi-fold increase in EBITDA margin anticipated upon completion of integration and expansion projects.

Operational Risks #

• Severity: High
• Likelihood: Medium
• Trend: Decreasing
• Mitigation Strategies: Ongoing projects to expand smelting capacity to 3 MTPA, increase refining capacity to 6 MTPA by FY 2025-26, and secure low-cost raw materials through mine development (Sijimali bauxite mine, Jamkhani, Kurloi, Ghogharpalli, and Radhikapur coal mines).
• Control Effectiveness: Progressing, with the commissioning of Train-I at Lanjigarh refinery and ongoing development of mines.
• Potential Financial Impact: Seven consecutive quarters of cost reduction, driving down the cost of production (COP) by US$ 942 per tonne to US$ 1,711 per tonne in Q4 FY 2023-24. Aluminium segment EBITDA grew 67% Y-O-Y to ` 9,657 crore for FY 2023-24.

Financial Risks #

• Severity: Medium
• Likelihood: Medium
• Trend: Decreasing
• Mitigation Strategies: Focus on cost optimization and value-added product portfolio. Hedging strategies.
• Control Effectiveness: Effective, demonstrated by a 67% growth in segment EBITDA in FY 2023-24, despite a 11% Y-O-Y fall in average LME prices.
• Potential Financial Impact: Fluctuations in LME aluminium prices.

Compliance/Regulatory Risks #

• Severity: Medium
• Likelihood: Low
• Trend: Stable
• Mitigation Strategies: Continuous engagement.
• Control Effectiveness: Not specified in the provided data.
• Potential Financial Impact: Not quantified.

Zinc India #

Strategic Risks #

• Severity: Medium
• Likelihood: Low
• Trend: Stable
• Mitigation Strategies: Focus on enhancing resource base through exploration.
• Control Effectiveness: Effective, as evidenced by mine life of 25+ years, supported by an R&R of 456 million tonnes.
• Potential Financial Impact: Not quantified.

Operational Risks #

• Severity: Medium
• Likelihood: Low
• Trend: Decreasing
• Mitigation Strategies: Ongoing automation and digitalization efforts, focus on efficient ore hauling, higher volume and grades, and higher productivity.
• Control Effectiveness: Effective, with record mined metal and refined metal production and sustained cost reduction for five consecutive quarters. COP decreased by US$ 242 per tonne to US$ 1,051 per tonne in Q4 FY 2023-24.
• Potential Financial Impact: FY 2023-24 segment EBITDA of ` 13,562 crore.

Financial Risks #

• Severity: Medium
• Likelihood: Medium
• Trend: Stable
• Mitigation Strategies: Cost reduction and operational efficiency measures.
• Control Effectiveness: Partially effective, FY 2023-24 average COP was US$ 1,117 per tonne, contributing to segmental EBITDA.
• Potential Financial Impact: Volatility in zinc LME prices (average price down 25% Y-O-Y).

Compliance/Regulatory Risks #

• Severity: Low
• Likelihood: Low
• Trend: Stable
• Mitigation Strategies: Not specified in provided data.
• Control Effectiveness: Not specified in the provided data.
• Potential Financial Impact: Not quantified.

Zinc International #

Strategic Risks #

• Severity: High
• Likelihood: Medium
• Trend: Stable
• Mitigation Strategies: Focus on expansion projects (Gamsberg Phase 2) and exploration.
• Control Effectiveness: Partially effective; Gamsberg Phase 2 project at 60% completion.
• Potential Financial Impact: Project delays or cost overruns could impact profitability.

Operational Risks #

• Severity: High
• Likelihood: Medium
• Trend: Increasing
• Mitigation Strategies: Ramp-up of Gamsberg and BMM production.
• Control Effectiveness: Mixed; challenges with lower ore mining and grades, impacting mined metal production.
• Potential Financial Impact: FY 2023-24 mined metal production was 208 kt.

Financial Risks #

• Severity: Medium
• Likelihood: Medium
• Trend: Stable
• Mitigation Strategies: Focus on cost optimization.
• Control Effectiveness: Partially effective; COP impacted by lower production.
• Potential Financial Impact: Lower ore mining and grade impacting production and profitability.

Compliance/Regulatory Risks #

• Severity: Low
• Likelihood: Low
• Trend: Stable
• Mitigation Strategies: Not specified in provided data.
• Control Effectiveness: Not specified in the provided data.
• Potential Financial Impact: Not quantified.

Oil & Gas #

Strategic Risks #

• Severity: High
• Likelihood: Medium
• Trend: Increasing
• Mitigation Strategies: Focus on reserve augmentation, new recovery technologies, infill drilling, and exploration campaigns.
• Control Effectiveness: Mixed; Production decline was mitigated by new infill wells.
• Potential Financial Impact: Reserve and resource base decline, and production decrease.

Operational Risks #

• Severity: High
• Likelihood: Medium
• Trend: Increasing
• Mitigation Strategies: Use of leading-edge technologies, large-scale AIML enabled base.
• Control Effectiveness: Partially effective; natural field decline impacting production.
• Potential Financial Impact: Average gross operated production of 128 Kboepd, down 11% Y-O-Y.

Financial Risks #

• Severity: Medium
• Likelihood: Medium
• Trend: Decreasing
• Mitigation Strategies: Focus on low-cost base and free cash flow generation.
• Control Effectiveness: Effective, with an OPEX of US$ 13.9/boe.
• Potential Financial Impact: Volatility in Brent crude prices (average down 13% Y-O-Y).

Compliance/Regulatory Risks #

• Severity: High
• Likelihood: Medium
• Trend: Increasing
• Mitigation Strategies: Active engagement with regulatory bodies and securing necessary approvals.
• Control Effectiveness: Partially effective. Ongoing legal and regulatory challenges.
• Potential Financial Impact: Legal and regulatory changes, and potential disputes impacting profitability.

Iron Ore #

Strategic Risks #

• Severity: Medium
• Likelihood: Low
• Trend: Decreasing
• Mitigation Strategies: Focus on production ramp-up and value-added business.
• Control Effectiveness: Effective; operationalisation of Bicholim mine and efforts to ramp up Liberia operations.
• Potential Financial Impact: Not quantified.

Operational Risks #

• Severity: Medium
• Likelihood: Low
• Trend: Decreasing
• Mitigation Strategies: Improvement in logistics efficiency.
• Control Effectiveness: Effective; highest-ever annual saleable ore production at Karnataka (5.6 million tonnes).
• Potential Financial Impact: Operational disruptions impacting production volumes.

Financial Risks #

• Severity: Medium
• Likelihood: Medium
• Trend: Decreasing
• Mitigation Strategies: Cost optimisation and focus on value-added business.
• Control Effectiveness: Partially effective; FY 2023-24 EBITDA of ` 1,676 crore.
• Potential Financial Impact: Fluctuations in iron ore prices.

Steel #

Strategic Risks #

• Severity: Medium
• Likelihood: Low
• Trend: Decreasing
• Mitigation Strategies: Capacity expansion to 3.5 MTPA in FY 2024-25.
• Control Effectiveness: Progressing, with expansion projects on track.
• Potential Financial Impact: Delays or cost overruns in expansion projects.

Operational Risks #

• Severity: Medium
• Likelihood: Low
• Trend: Decreasing
• Mitigation Strategies: Focus on operational efficiency and utilisation of captive iron ore.
• Control Effectiveness: Effective; highest-ever saleable production and dispatches.
• Potential Financial Impact: Operational disruptions impacting production volumes.

Financial Risks #

• Severity: Medium
• Likelihood: Medium
• Trend: Stable
• Mitigation Strategies: Focus on cost efficiency and value-added products.
• Control Effectiveness: Partially effective; FY 2023-24 EBITDA of ` 225 crore.
• Potential Financial Impact: Fluctuations in steel prices.

Ferro Alloys #

Strategic Risks #

• Severity: Medium
• Likelihood: Low
• Trend: Decreasing
• Mitigation Strategies: Capex of ` 2,650 crore approved for expanding ferrochrome capacity.
• Control Effectiveness: Progressing, with plans to become India’s largest ferrochrome producer by FY 2026-27.
• Potential Financial Impact: Delays or cost overruns in expansion projects.

Operational Risks #

• Severity: Medium
• Likelihood: Low
• Trend: Decreasing
• Mitigation Strategies: Focus on operational efficiency.
• Control Effectiveness: Effective; highest-ever Ferrochrome production of 80 kt in FY 2023-24.
• Potential Financial Impact: Operational disruptions impacting production volumes.

Financial Risks #

• Severity: Medium
• Likelihood: Medium
• Trend: Stable
• Mitigation Strategies: Focus on cost efficiency.
• Control Effectiveness: Partially effective; FY 2023-24 EBITDA of ` 115 crore.
• Potential Financial Impact: Fluctuations in ferrochrome prices.

Copper India #

Strategic Risks #

• Severity: High
• Likelihood: High
• Trend: Stable
• Mitigation Strategies: Evaluating legal remedies for sustainable restart of Tuticorin smelter.
• Control Effectiveness: Ineffective; Tuticorin smelter remains non-operational.
• Potential Financial Impact: Continued non-operation significantly impacts revenue and profitability.

Operational Risks #

• Severity: Medium
• Likelihood: Low
• Trend: Stable
• Mitigation Strategies: Focus on Silvassa refinery operations.
• Control Effectiveness: Effective; Silvassa refinery produced 141 kt of cathode in FY 2023-24.
• Potential Financial Impact: Limited, given the focus on Silvassa operations.

Financial Risks #

• Severity: Medium
• Likelihood: Medium
• Trend: Stable
• Mitigation Strategies: Focus on cost efficiency and Silvassa operations.
• Control Effectiveness: Partially effective, given the limitations due to the Tuticorin smelter closure.
• Potential Financial Impact: Volatility in copper prices.

Compliance/Regulatory Risks #

• Severity: High
• Likelihood: High
• Trend: Stable
• Mitigation Strategies: Legal remedies
• Control Effectiveness: Ineffective; Tuticorin smelter remains non-operational.
• Potential Financial Impact: Significant, given the continued closure of Tuticorin smelter.

Power #

Strategic Risks #

• Severity: Medium
• Likelihood: Low
• Trend: Decreasing
• Mitigation Strategies: Focus on upcoming thermal power plants (Meenakshi and Athena) and securing financing.
• Control Effectiveness: Progressing; Unit 1 of Meenakshi Power Plant synchronised, financing secured for Athena.
• Potential Financial Impact: Delays in commissioning new power plants.

Operational Risks #

• Severity: Medium
• Likelihood: Medium
• Trend: Stable
• Mitigation Strategies: Focus on operational efficiency and captive power utilisation.
• Control Effectiveness: Mixed; TSPL plant availability at 82%, Jharsuguda plant operated at a lower PLF due to ash evacuation constraints.
• Potential Financial Impact: Operational disruptions impacting power generation and sales.

Financial Risks #

• Severity: Medium
• Likelihood: Medium
• Trend: Stable
• Mitigation Strategies: Not specified
• Control Effectiveness: Partially effective; power sales of 13,443 million units in FY 2023-24.
• Potential Financial Impact: Fluctuations in power prices and demand.

Segment-Wise Financial Analysis #

Aluminium #

Long-Term Strategic Goals and Progress #

Vedanta aims to be among the top 3 global producers ex-China. Progress includes the commissioning of Train-1 at the Lanjigarh refinery, expanding refining capacity to 3.5 MTPA, and an ongoing 1 MTPA expansion at BALCO, anticipated to be commissioned in H2 FY25 to reach 3 MTPA total smelting capacity.

Competitive Advantages and Market Positioning #

Vedanta is the largest aluminium producer in India, with a 45% market share among primary producers. It maintains a low-cost producer status, positioned in the first quartile of the global cost curve.

Innovation Initiatives and R&D Effectiveness #

Vedanta has implemented a patented ‘Vedanta lining design’ at the Jharsuguda smelter to enhance energy efficiency and extend smelting pot lifespan.

Capital Allocation Strategy #

Ongoing investments for backward integration are in place including increased captive alumina and coal supplies.

Management Track Record in Execution #

Lanjigarh refinery capacity was expanded to 3.5 MTPA. Additionally, the company is progressing as per plan on a debottlenecking exercise that can achieve 6 MTPA alumina refinery capacity by FY 2025-26.

Zinc India #

Long-Term Strategic Goals and Progress #

HZL aims for sustained mine production for the next 10 years. They have acquiring new potential areas through auction and Ore reserves upgradation.

Competitive Advantages and Market Positioning #

Vedanta holds a 75% market share in India’s primary zinc market through HZL. The company has low-cost zinc producer position, lying in the first decile of the global zinc cost curve (2023).

Innovation Initiatives and R&D Effectiveness #

Implemented Advanced Process Control (APC) at all Rampura Agucha beneficiation plants. Introduced battery-operated electric vehicles at the SK mine for sustainable operations.

Management’s Track Record in Execution #

The business recorded highest-ever mined metal production and highest-ever silver production.

Zinc International #

Long-Term Strategic Goals and Progress #

Gamsberg Phase 2 project is 60% complete, aiming to expand MIC capacity to 500 KTPA.

Management Track Record of Execution #

Faced challenges with lower ore mining, with mined metal production down.

Oil & Gas #

Long-Term Strategic Goals and Progress #

Aims to halt and reverse production decline through new technologies and drilling.

Management Track Record of Execution #

Production was ramped-up from Jaya discovery in OALP Cambay region.

Competitive Advantages and Market Positioning #

Vedanta operates ~25% of India’s crude oil production.

Innovation Initiatives and R&D Effectiveness #

Implemented one of the largest polymer EOR projects in the world.

Power #

Long-Term Strategic Goals and Progress #

The company is aiming to supply approximately 5 GW of commercial power within the next two years.

Competitive Advantages and Market Positioning #

Vedanta is one of the largest power producers in India’s private sector, with a total power portfolio of 11 GW and 4.8 GW of installed IPP capacity.

Management Track Record in Execution #

TSPL plant availability was 82% in FY 2023-24.

Iron Ore #

Long-Term Strategic Goals and Progress #

Poised for production ramp-up to 12 MTPA and 1 MTPA of Value-Added Business (VAB).

Competitive Advantages and Market Positioning #

Vedanta is one of the largest merchant iron ore miners in India and one of the largest producers and exporters of merchant pig iron in India.

Management Track Record of Execution #

Operationalised the 3 MTPA Bicholim mine in Goa. Secured environmental clearance for expanding IOK to 7.2 MTPA.

Steel #

Long-Term Strategic Goals and Progress #

The steel business is on track to expand capacity to 3.5 MTPA in FY 2024-25.

Competitive Advantages and Market Positioning #

The business has a design capacity of 3.5 MTPA, focusing on long steel products.

Management Track Record in Execution #

Highest-ever hot metal production of 1,473 kt and highest-ever DIP production of 212 kt were achieved.

Ferro Alloys #

Long-Term Strategic Goals and Progress #

The Board has approved a capex of C 2,650 crore for expanding ferrochrome capacity from 150 KTPA to 450 KTPA, aiming to become India’s largest ferrochrome producer by FY 2026-27.

Management Track Record in Execution #

FACOR recorded the highest-ever Ferrochrome production of 80 kt, an increase of 18% over the previous year.

Copper India #

Competitive Advantages and Market Positioning #

The business has one of the largest copper production capacities in India.

Management Track Record in Execution #

Cathode production from Silvassa was 141 kt.

Segment-Wise Financial Analysis and ESG Performance #

Aluminium #

Environmental Metrics and Targets #

• Achieved highest-ever aluminium production of 2,370 kt, a 3% year-on-year growth.
• Reduced aluminium cost of production (COP) by US$ 942 per tonne to US$ 1,711 per tonne in Q4 FY 2023-24, with an average COP of US$ 1,796 per tonne for FY 2023-24, contributing to a 67% growth in segment EBITDA.
• Lanjigarh refinery capacity expanded to 3.5 MTPA.
• Ongoing projects include commissioning of 1.5 MTPA Train-II capacity scheduled for Q2 FY 2024-25, with the expansion on track to get completed in H2FY25 and debottlenecking to achieve 6 MTPA alumina refinery capacity by FY 2025-26.
• Targeting power reduction of 250 kWh/t and a GHG emission reduction of 0.432 million tCO2e annually upon full-scale implementation of ‘Vedanta lining design’.
• Began production of low-carbon aluminium products, Restora.
• Increased rail share for coal and other bulk commodities to lower costs and reduce environmental impact.

Social Responsibility Programs #

• Undertook community infrastructure projects and provided healthcare support, including constructing a temple and donating an ultrasound machine to the local healthcare facility.

Governance Structure and Effectiveness #

• Adherence to Vedanta’s Sustainability Framework, aligning with international best practices and structured assurance programs.

Sustainability Investments and ROI #

• Investment in digitalisation programmes totalled C 160 crore.
• Implemented Industry 4.0 technologies like Digital Twin and Advanced Process Control to enhance efficiency.
• Ongoing investments in renewable energy projects with 838 MW under construction against RE power delivery agreements (PDAs) of 1,826 MW.

ESG Ratings and Peer Comparison #

• Ranked 1st in the aluminium peer group in the S&P Global Corporate Sustainability Assessment 2023.

Regulatory Compliance and Future Preparations #

• Actively progressing with land acquisition and obtaining necessary statutory approvals for renewable energy projects.
• Planning for phased completion of renewable energy projects, starting from Q1 FY 2024-25.

Zinc India #

Environmental Metrics and Targets #

• Record mined metal production of 1,079 kt, a 2% increase year-on-year.
• Highest-ever silver production at 746 tonnes, up 5% year-on-year.
• Reduced cost of production (COP) by US$ 242 per tonne to US$ 1,051 per tonne in Q4 FY 2023-24, averaging US$ 1,117 per tonne for the year.
• Targeting a transition to one-third Battery Electric Vehicle (BEV) deployment at RA & SK Mines.
• Utilised 92% of HVLT waste

Social Responsibility Programs #

• Trained India’s first all-women mining rescue team.
• Launched Project Panchhi to support young women in local communities with higher education and employment at Vedanta.

Governance Structure and Effectiveness #

• Complies with the Vedanta Sustainability Framework and aligns with international and local regulations.

Sustainability Investments and ROI #

• Invested in digitalisation and innovation to drive efficiency.
• Ongoing projects include a 160 KTPA Roaster Plant and a 510 KTPA fertiliser plant.
• Commissioned Mill 3 at Zawar to increase beneficiation capacity.

ESG Ratings and Peer Comparison #

• Ranked 1st in the metal and mining sector in the S&P Global Corporate Sustainability Assessment 2023.
• Recognised as a global leader in sustainability.

Regulatory Compliance and Future Preparations #

• Securing new tenements for R&R growth.
• Target generation and drill testing at Zawar, RD-SK, RA, and Kayad Mine.
• Aim to retain existing mining leases and acquire new potential areas.

Oil & Gas #

Environmental Metrics and Targets #

• GHG emissions increased marginally by 0.8% year-on-year.
• Water positivity ratio improved to 0.71, with a 2.7% reduction in freshwater consumption.
• Maintained LTIFR at 0.59 and TRIFR at 1.3.

Social Responsibility Programs #

• Supported community development, impacting 17.4 million beneficiaries through health, nutrition, education, and other initiatives.

Governance Structure and Effectiveness #

• Adherence to the Vedanta Sustainability Framework.
• Zero governance issues reported.

Sustainability Investments and ROI #

• Planned investment of US$ 5 billion over the next decade for decarbonisation.
• Constructing 838 MW of RE RTC projects, with 1,826 MW under power delivery agreements.

ESG Ratings and Peer Comparison #

• Improved ESG ratings in MSCI, DJSI, Sustainalytics, and CDP water.

Regulatory Compliance and Future Preparations #

• Focus on achieving net zero carbon by 2050 or sooner.
• Implementing water recycling and consumption optimisation efforts.
• Habitat restoration of 2,300 hectares is planned.

Iron Ore & Steel #

Environmental Metrics and Targets #

• Highest-ever production of saleable ore at Karnataka at 5.6 million tonnes.
• Highest-ever pig iron production at 831 kt.
• Operationalised the 3 MTPA Bicholim mine in Goa.

Social Responsibility Programs #

• Continued community engagement and support programs.

Governance Structure and Effectiveness #

• Compliance with stringent risk management and internal control systems.

Sustainability Investments and ROI #

• Investment in vertical integration and expansion projects.
• Commenced first mining operation in Goa in nearly six years with the operationalisation of the Bicholim mine.

ESG Ratings and Peer Comparison #

• Focus on aligning with the Group’s overall ESG strategy.

Regulatory Compliance and Future Preparations #

• Secured environmental clearance for expanding Iron Ore Karnataka (IOK) to 7.2 MTPA.
• Efforts to ramp up operations in Liberia from 1 MTPA to 2.5 MTPA.

Power #

Environmental Metrics and Targets #

• Overall power sales of 13,443 million units.
• Marginal increase in GHG emissions by 0.8% year-on-year.

Social Responsibility Programs #

• Community support programmes, impacting a significant number of beneficiaries.

Governance Structure and Effectiveness #

• Adherence to the Company’s Code of Business Conduct and Ethics.

Sustainability Investments and ROI #

• Investment in new thermal power plants at Meenakshi (1,000 MW) and Athena (1,200 MW).

ESG Ratings and Peer Comparison #

• Efforts to improve sustainability metrics in line with overall Group objectives.

Regulatory Compliance and Future Preparations #

• Ongoing efforts to synchronise Unit 1 of the 150 MW Meenakshi Power Plant.
• Securing financing for Athena to support the goal of supplying 5 GW of commercial power within the next two years.

Ferro Alloys #

Environmental Metrics and Targets #

• Highest-ever ferrochrome production of 80 kt.
• Reduction in Prime Hard coal consumption by 20%
• Implementation of waste heat recovery systems in furnaces.

Social Responsibility Programs #

• Community engagement and support as part of the Group’s CSR initiatives.

Governance Structure and Effectiveness #

• Adherence to the Company’s governance framework and policies.

Sustainability Investments and ROI #

• Capex of C 2,650 crore approved for expanding ferrochrome capacity from 150 KTPA to 450 KTPA.

ESG Ratings and Peer Comparison #

• Alignment with Vedanta’s overall ESG strategy.

Regulatory Compliance and Future Preparations #

• Focus on expanding ferrochrome production capacity to become India’s largest producer by FY 2026-27.

Copper India #

Environmental Metrics and Targets #

• Cathode production from Silvassa at 141 kt.
• Focus on maintaining regulatory compliance at operational sites.

Social Responsibility Programs #

• Support for community health and education programs.

Governance Structure and Effectiveness #

• Adherence to Vedanta’s Code of Business Conduct and Ethics.

Sustainability Investments and ROI #

• Investment in sustainable practices and operational efficiencies.

ESG Ratings and Peer Comparison #

• Alignment with the Group’s sustainability targets and initiatives.

Regulatory Compliance and Future Preparations #

• Ongoing efforts to address regulatory compliance, particularly related to the Tuticorin smelter, which is currently not operational.

Zinc International #

Environmental Metrics and Targets #

• Total zinc MIC production at 208 kt.
• Focus on reducing GHG emissions and improving water recycling.

Social Responsibility Programs #

• Support for community development initiatives and local welfare programs.

Governance Structure and Effectiveness #

• Compliance with global and local regulations and standards.

Sustainability Investments and ROI #

• Gamsberg Phase 2 project has achieved nearly 60% completion, aiming to expand MIC capacity to 500 KTPA.

ESG Ratings and Peer Comparison #

• Alignment with Group’s ESG goals, with a focus on safety and environmental performance.

Regulatory Compliance and Future Preparations #

• Continued efforts to meet statutory requirements and enhance environmental stewardship.
• Execution of drilling across greenfield and brownfield projects in South Africa and Namibia.

Future Outlook: Segment-Wise Financial Analysis #

Zinc India #

Management Guidance and Assumptions #

• Management maintains a cost of production target between US$1,050 and US$1,100 per tonne.
• FY 2024-25 refined metal production is projected to be between 1,080 kt and 1,100 kt.

Market Growth Forecasts #

• Indian zinc market is estimated to grow by 19% Y-o-Y.
• Global refined zinc consumption is projected to grow by 2.3% in FY 2024-25.
• Indian zinc market growth is expected to be over 10% for FY 2024-25.

Planned Strategic Initiatives #

• Further ramp-up of underground mines towards a design capacity of 1.2 MTPA.
• Commissioning of a combined paste-fill and dry tailing plant at Rajpura Dariba to increase ore production capacity.
• Migration to 100% mechanized charging at Zawar.
• Construction and commissioning of new ZLD plants at Agucha and Zawar.
• Commissioning of a new beneficiation plant at RDM.
• Introduction of Battery Electric Vehicles (BEV) at SK mine.
• Completion of Mill 3 at Zawar.
• Transition to one-third BEV deployment at RA & SK Mines.
• Target generation through AI & ML with advanced geophysics.

Capital Expenditure Plans #

• Ongoing projects include the 160 KTPA Roaster Plant and 510 KTPA fertilizer plant.
• Planned capacity expansion through the erection of Roaster-6.
• Setting up of a new 510 KTPA fertiliser plant in Chanderiya.
• Up to 450 MW green energy sourcing in operations.

Efficiency Improvement Targets #

• Efficient ore hauling.
• Higher volume and grades.
• Higher productivity through automation and digitalization.
• Switching to RE power from CPP (partially at DSC zinc smelter).
• Increase in Indian coal consumption in blend (>40%) for power production.
• Waste elimination through gainful utilisation and recycling.
• Deployment of new innovation and technology for benchmark operation.

Potential Challenges and Opportunities #

• Opportunities:
  • Strong growth in the Indian zinc market, driven by government infrastructure development, urbanization, and industrialization.
  • Potential for increased silver production.
  • Opportunities for waste utilization and recycling.
  • Securing new tenements for R&R growth.
• Challenges:
  • Managing production decline in existing mines.

Zinc International #

Management Guidance and Assumptions #

• Management aims to ramp-up Gamsberg to 200 kt in FY 2024-25.
• BMM improvement in ore production from 1.6 mt to 2.0 mt resulting in 70 kt MIC production.
• Focus to place Gamsberg operations on 1st Quartile of global cost curve with COP< US$ 1,200 per tonne.

Planned Strategic Initiatives #

• Gamsberg Phase 2 project to expand MIC capacity to 500 KTPA (~60% complete as of the provided text).
• Skorpion Refinery conversion is awaiting confirmation of the power tariff.
• Black Mountain Iron Ore project to produce high-grade iron ore; first production expected in Q3/Q4 FY 2024-25.
• Targeting 300 KTPA production from South Africa at low cost of production by FY 2025-26.
• Gergarub mining and concentrator plant planned to be in production by FY 2026-27, delivering MIC of 100 KTPA.

Capital Expenditure Plans #

• Ongoing Gamsberg Phase 2 project with US$ 466 million CAPEX incurred.
• Planned Skorpion Refinery conversion project awaiting a final decision.
• Black Mountain Iron Ore project is in the plan.

Efficiency Improvement Targets #

• BMM to improve ore production from 1.6 mt to 2.0 mt.

Potential Challenges and Opportunities #

• Opportunities:
  • Potential to significantly increase production capacity through Gamsberg expansion and other projects.
  • Potential for new revenue streams from iron ore production.
• Challenges:
  • Lower ore mining and lower grades at Gamsberg.
  • Dependence on power tariff confirmation for Skorpion Refinery conversion.

Oil & Gas #

Management Guidance and Assumptions #

• Management aims to halt and reverse production decline through new recovery technologies, additional infill wells, and extending polymer-flood EOR schemes.

Market Growth Forecasts #

• OPEC indicates India’s crude oil import in CY2023 will reach a record high of 4.7 mbpd.
• India’s oil demand is expected to increase by 0.2 Mbpd to 5.6 Mbpd in CY 2024.

Planned Strategic Initiatives #

• Continue to operate at a low-cost base and generate free cash flow post-capex.
• Infill drilling in Rajasthan (Mangala, Bhagyam, Aishwariya, Tight Oil (ABH), Tight Gas (RDG)) and Satellite Field.
• Drilling campaign in the North-East region.
• Execution of one of the largest polymer EOR projects.
• Execution of the Alkaline Surfactant Polymer (ASP) project at Mangala.
• Monetisation of discoveries from OALP, DSF and PSC blocks.

Capital Expenditure Plans #

• FY 2024-25 plan for a 10-well exploration campaign in Assam.
• Mobilisation of rigs to east and west coast assets for multi-year drilling programmes.
• Ongoing implementation of infill wells across PSC blocks to mitigate natural decline.

Efficiency Improvement Targets #

• Use of leading-edge technologies and large-scale AIML enabled base.
• Operations and Maintenance (O&M) model in partnership with best-in-class partners.
• Achieve operational efficiencies through win-win partnership models with global technology leaders.

Potential Challenges and Opportunities #

• Opportunities:
  • Significant potential for reserve and resource augmentation.
  • Potential for incremental volume from new recovery technologies and OALP field.
• Challenges:
  • Managing natural decline in existing fields.
  • Regulatory compliance and market volatility in monetising new fields.

Aluminium #

Management Guidance and Assumptions #

• Management aims for a multi-fold increase in EBITDA margin.
• Anticipates Aluminium business to generate more than US$ 4 billion EBITDA at 3 MTPA capacity.
• Targeting the first decile position on the global aluminium cost curve.

Market Growth Forecasts #

• Global aluminium demand projected to reach 122 million tonnes by CY 2030.
• Demand is expected to grow at a CAGR of ~3%.
• India’s domestic demand surged 17% Y-o-Y in FY 2023-24.
• Domestic demand is expected to increase by 8-10%.

Planned Strategic Initiatives #

• Ongoing 1 MTPA expansion at BALCO to expand total smelting capacity to 3 MTPA, targeting commissioning in H2 FY 2024-25.
• Lanjigarh refinery expansion to achieve 6 MTPA alumina refinery capacity by FY 2025-26.
• Development of the 9 MTPA Sijimali bauxite mine, with initial production expected in Q3 FY 2024-25.
• Ramp-up of Jamkhani mine and commissioning of Kurloi, Ghogharpalli, and Radhikapur mines within the next 9-12 months.
• Scaling up value-added products (VAP) capacity at Jharsuguda and BALCO from 1.4 MTPA to 2.6 MTPA, increasing its share from 60% to 90%.
• Increasing rolled product capacity from 44,000 TPA to 1,00,000 TPA.

Capital Expenditure Plans #

• Continued investment in capacity expansion and vertical integration projects.

Efficiency Improvement Targets #

• Continued cost reduction, targeting US$ 1,000/t EBITDA margin.
• Reduced power purchases due to higher operational efficiency of captive thermal power plants.
• Increased rail share of domestic overland transport.

Potential Challenges and Opportunities #

• Opportunities:
  • Growing demand for aluminium in power systems, automotive sector, aerospace, building and construction, and packaging.
  • Potential to be among the top 3 aluminium producers globally ex-China.
  • Potential to significantly enhance EBITDA margin through cost structure revolution.
• Challenges:
  • Volatility in commodity prices.
  • Ensuring timely completion of expansion projects.

Power #

Management Guidance and Assumptions #

• Management is focused on supplying ~5 GW of commercial power within the next two years.

Market Growth Forecasts #

• India’s power demand is expected to rise, with electricity demand surging by 7.9% to reach 1,227 BUs in FY 2023-24.
• A minimum of ~87 GW of additional thermal capacity addition is required in the next 7 years.

Planned Strategic Initiatives #

• Synchronization of Unit 1 of the 150 MW Meenakshi Power Plant in FY 2024-25.
• Securing financing for the Athena power plant.
• Supplying ~5 GW of commercial power within the next two years.

Capital Expenditure Plans #

• Ongoing investments in Meenakshi and Athena thermal power plants.

Potential Challenges and Opportunities #

• Opportunities:
  • Significant opportunity to become one of the largest commercial power suppliers to the national grid.
  • Potential for better realisations due to increased tariffs for RTC power in power exchanges.
• Challenges:
  • Ensuring timely completion of power plant projects.

Iron Ore & Steel #

Management Guidance and Assumptions #

• Management targets a production ramp-up to 12 MTPA for iron ore, complemented by 1 MTPA of value-added business (VAB).
• Targeting production of 4.5 MTPA of steel and pig iron in the facilities.

Planned Strategic Initiatives #

• Ramp-up in Liberia operations from 1 MTPA to 2.5 MTPA.
• Steel business expansion to 3.5 MTPA capacity in FY 2024-25.
• Steel and VAB expansion to enable production of 4.5 MTPA of steel and pig iron.

Capital Expenditure Plans #

• Investments in expanding iron ore production and value-added business.

Potential Challenges and Opportunities #

• Opportunities:
  • Potential for significant production increases in iron ore and steel.
  • Expansion into value-added businesses.
• Challenges:
  • Managing production ramp-up and operational efficiency.

Ferro Alloys #

Management Guidance and Assumptions #

• Management aims to become India’s largest ferrochrome producer by FY 2026-27.

Planned Strategic Initiatives #

• Expansion of ferrochrome capacity from 150 KTPA to 450 KTPA by FY 2026-27.

Capital Expenditure Plans #

• Board approved capex of C 2,650 crore for ferrochrome capacity expansion.

Potential Challenges and Opportunities #

• Opportunities:
  • Potential to become the largest ferrochrome producer in India.
• Challenges:
  • Executing the expansion project within the defined timeline and budget.

Scenario Analysis and Sensitivity #

• All Segments: Fluctuations in commodity prices, particularly aluminium and zinc, and Brent crude oil prices, present significant risks. Sensitivity analysis indicates that a 10% movement in LME prices can substantially affect pre-tax profit. A 1% increase in the discount rate can have significant impact on the recoverable value, as mentioned in Key Audit Matters of Auditor’s Report.
• Oil & Gas: Changes in production forecasts and reserve estimates, alongside litigation related to cost recovery, can materially impact financial outcomes.
• Power: Disputes over receivables and power purchase agreements represent risks, with potential financial implications.
• Zinc India and Aluminium: Cost optimisation measures are crucial for maintaining profitability, especially with the volatility in commodity prices.
• Overall Group: Currency fluctuations, especially the INR against the USD, present a significant risk, with a 10% strengthening or weakening having notable impacts on financials.

The Group’s financial performance is sensitive to a variety of factors, with commodity prices, currency fluctuations, and operational efficiency being key. Strategic initiatives, such as vertical integration and cost reduction, aim to mitigate some of these risks. However, external factors, including regulatory changes and market demand, remain significant determinants of financial outcomes.