Vedanta Q3 FY25: Aluminium & Zinc Output Hits New Highs

Introduction

Vedanta Limited has released its production results for the third quarter and nine months ending December 31, 2024, revealing a period of significant operational achievement. The company reported record production volumes for the first nine months of fiscal year 2025 in its core aluminium, alumina, and zinc businesses. This performance highlights sustained operational efficiency and growth across its primary metal verticals, even as other segments presented a more mixed picture.

Aluminium and Alumina Segments Shine

The aluminium business demonstrated consistent growth during the third quarter. Total aluminium production increased by 3% year-over-year (YoY) to 614,000 tonnes. This growth was supported by steady output from both the Jharsuguda plant, which produced 464,000 tonnes (up 3% YoY), and the BALCO facility, which contributed 150,000 tonnes (up 2% YoY). For the nine-month period, total aluminium production reached 1,819,000 tonnes, a 3% increase compared to the same period in the previous fiscal year.

Supporting this strong performance, the Lanjigarh alumina refinery also posted impressive numbers. Alumina production for Q3 FY25 stood at 505,000 tonnes, a 7% increase YoY. The nine-month performance was even more notable, with alumina output jumping 16% YoY to 1,542,000 tonnes, reflecting enhanced capacity utilization and operational stability.

Zinc India Achieves New Milestones

Vedanta's subsidiary, Hindustan Zinc Limited (HZL), continued its strong run, setting new records. The company achieved its highest-ever refined metal production for a nine-month period, reaching 783,000 tonnes, up 3% YoY. This was driven by a 3% rise in refined zinc output to 613,000 tonnes and a 4% increase in refined lead to 170,000 tonnes.

In the third quarter, mined metal production was 265,000 tonnes, a slight 2% decrease from the previous year but a 3% improvement quarter-over-quarter (QoQ), driven by higher grades at the Agucha and Zawar mines. However, silver production saw a significant decline, falling 18% YoY to 160 tonnes (5.2 million ounces) for the quarter.

Zinc International Shows Strong Quarterly Growth

The company's international zinc operations also delivered a robust quarterly performance. Total mined metal production from Zinc International rose 12% YoY and 6% QoQ to 46,000 tonnes in Q3 FY25. This growth was primarily fueled by the Gamsberg mine in South Africa, where production surged 21% YoY to 35,000 tonnes due to higher zinc grades and improved recoveries. Despite the strong quarter, the cumulative nine-month production for Zinc International stood at 127,000 tonnes, a 27% decline from the previous year, indicating that challenges from earlier in the year impacted the overall nine-month figure.

Key Production Highlights: Q3 FY25

Performance Across Other Verticals

Vedanta's diversified portfolio showed varied results in other segments. The iron ore business reported a 10% YoY increase in saleable ore production to 1.5 million tonnes in Karnataka and Goa. Pig iron production also grew by 7% YoY to 217,000 tonnes.

The steel segment faced some headwinds, with finished production declining by 3% YoY to 329,000 tonnes. However, on a sequential basis, output was up 11%, indicating a recovery from a planned maintenance shutdown in the second quarter. In the oil and gas business, production from the OALP blocks stood at 4.0 kboepd, supported by the ramp-up of volumes from the Jaya discovery.

The power segment experienced a notable downturn, with overall power sales falling 21% YoY to 3,206 million units during the third quarter.

Operational Analysis

The Q3 and nine-month production figures underscore Vedanta's strong operational capabilities in its core metals businesses. The record output in aluminium, alumina, and zinc points to successful efficiency improvements and stable plant operations. The growth at Gamsberg is a positive sign for the international zinc business, suggesting a potential turnaround after a challenging start to the fiscal year. The sequential recovery in steel production also indicates operational resilience. However, the significant drop in power sales and the decline in silver output highlight areas where the company faces ongoing challenges.

Conclusion

Vedanta's production report for the first nine months of FY25 paints a picture of robust health in its primary revenue-generating segments. The record-setting performance in aluminium and zinc provides a solid foundation for the company's annual results. As Vedanta moves into the final quarter of the fiscal year, investors will be watching to see if this momentum can be sustained and if the underperforming segments can stage a recovery.