Vedanta targets 2.9 million tonne aluminium output
Vedanta Limited targets 2.9 million tonnes of aluminium production in FY28, up from 2.65 million tonnes planned for FY27.
Vedanta Aluminium also expects EBITDA of $1,600 to $1,650 per tonne, supported by cost-saving measures and higher alumina output.
The company plans to increase production by around 9.4% in FY28. Management believes debottlenecking existing facilities could eventually take capacity utilisation towards 3 million tonnes. Alumina production is expected to rise 10% next quarter, while improved bauxite supplies from Odisha could ease raw material constraints.
Aluminium prices remain a key variable. Management expects London Metal Exchange prices to stay near $3,100 per tonne, with a range of $3,000 to $3,200 during the current quarter. Around 22% of production has been hedged at $3,274 per tonne, providing some price visibility. However, petroleum coke and furnace oil costs remain under pressure, and planned power plant shutdowns could push production costs up by around 4%.
My view: The production target is encouraging, but the bigger factor to watch is whether higher volumes translate into better margins. Rising alumina output, improved bauxite availability and cost reductions could offset input inflation. However, aluminium prices and execution remain key risks. Management's plan to reduce net debt to half its current level by the end of the financial year is another important trigger to monitor.
Vedanta Limited shares traded at ₹236.30, up 1.39% on the day, but down 9.12% over the past month and 60.79% year to date, according to the figures provided. The next key indicators are quarterly cost trends, debt reduction and progress towards the FY28 production target.
Stance: Operational progress is positive, but margin improvement and debt reduction need to support a sustained recovery in the stock.