Vedanta hoping to ramp up aluminum capacity to 2.3-2.4 million tonnes
On the coal crisis and its impact on costs, Sunil Duggal of Vedanta said coal stocks are rising and the situation is getting better. He is hopeful that their EBITDA margins could stay at the current levels or even improve a bit.
Vedanta posted numbers largely in line with street expectations. The year-on-year revenues for the quarter were up 44.4 percent and operating profit was up 59 percent, with operating margins coming higher at 34.09 percent versus 30.94 percent.
Segment-wise aluminium business did very well with revenues around Rs 4,647 crore mark, while for oil and gas they came in at Rs 1,384 crore. The pressure was seen in the iron ore and steel segment which came in below estimates at Rs 723 crore from Rs 900 crore.
Sunil Duggal, CEO at Vedanta, said they were proud of what they have done in aluminium. "A few quarters back, we decided to raise the capacity of the aluminium from 1.8 million tonne to 2.2 6 million tonne exit run rate and we are hoping that we'll be able to ramp up some more parts and the capacity will go to 2.3--2.4 million tonnes,” he said, adding that they are also happy on their achievement on the cost front.
He said the average LME for October was better than Q2FY22. So as far as the commodity prices are concerned and looking at how the world is behaving, and the requirement of the metal, including aluminium going forward, also looking at how the world is focusing on ESG, he is sure of the commodity demand and the commodity prices will stay up, he added.
Talking about the coal crisis and its impact on costs, he said coal stocks are rising and the situation is getting better. He is hopeful that their EBITDA margins could stay at the current levels or even improve a bit. Going forward the whole situation is improving and the company could have a strong hold of costs, said Duggal.
Also Read:
So the belief is they would be able to hold the aluminium EBITDA per tonne above the $1000 market on the back of focus on costs, better commodity prices, focusing on the value-added products and expanding the product portfolio, said Duggal.
He also clarified that currently, they are not looking at delisting.
When asked on market speculation about Vedanta looking to sell the international zinc business to Hindustan Zinc, Duggal said, “I will not be able to comment on the board matter. But broadly, I will tell you what could be the synergy. Synergy is like that Hindustan Zinc has its R&R of contained metal similar to Zinc International, so it is a good marriage. So, South Africa is mining, country and geography and Hindustan Zinc has its own strength. So, if they marry each other, this will be more like one plus 1+1 is equal to 11. It will be very happy marriage.”
He further said that he would not be able to divulge any further information at this point in time, because it is was a board matter. As far as approvals are concerned, since Hindustan Zinc is a related business, "we do not require separate permission from the government of India. It required the board approval and will also require the shareholder".
For the full interview, watch the video
(Edited by : Priyanka Rathi)
First Published: Nov 1, 2021 4:58 PM IST
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
Lok Sabha Election 2024: What rural Delhi wants
May 16, 2024 10:10 PM
Over 50 onion farmers detained in Nashik ahead of PM Modi's visit
May 16, 2024 11:14 AM
Why Google CEO is cautiously optimistic about the election year
May 16, 2024 9:51 AM
Mark Mobius reveals how markets will react if NDA wins 400+ Lok Sabha seats
May 15, 2024 8:09 PM