Vedanta Q4 Output Hits Record High; Demerger Nears Finish

Introduction

Shares of mining conglomerate Vedanta Limited are under the spotlight following a strong operational update for the fourth quarter of the financial year 2025-26. The company announced its highest-ever aluminium production, providing a significant boost to investor sentiment. This operational milestone comes as Vedanta moves into the final stages of a major corporate restructuring, with its planned demerger into five separate listed entities now extended to June 2026, keeping the stock firmly in focus.

Record-Breaking Q4 Performance

Vedanta's operational update for the quarter and fiscal year ending March 31, 2026, showcased robust growth across several key segments. The company achieved its highest-ever aluminium production, reaching 2,456 kilotonnes (kt). For the full financial year, alumina production saw a substantial increase of 48% year-on-year, totaling 2,916 kt. This performance highlights the company's successful capacity expansions and operational efficiency improvements.

The growth was not limited to its aluminium business. Mined metal production at its subsidiary Zinc India rose by 2% annually to 1,114 kt. Silver production also saw a significant sequential jump of 11% to 176 tonnes, bringing the full-year volume to 627 tonnes. Furthermore, power sales surged by 43% year-on-year, largely driven by the contributions from its Athena and Meenakshi plants.

Production Highlights for FY2026

To provide a clearer picture of its annual performance, Vedanta's production figures demonstrate broad-based growth across its commodity portfolio.

The Demerger Timeline and Structure

Vedanta's board is advancing a plan to demerge the conglomerate into five distinct, publicly listed companies. This strategic move, which received approval from the National Company Law Tribunal (NCLT) in December 2025, aims to unlock value for shareholders. While the demerger was initially anticipated to be completed sooner, the deadline has been formally extended to June 30, 2026, to finalize all regulatory requirements. Chairman Anil Agarwal has indicated a target completion for the entire process by March 2026.

Under the approved scheme, for every one share held in Vedanta Limited, shareholders will receive one share in each of the four new companies that will be listed, in addition to retaining their existing share.

A Look at the Five New Entities

The demerger will create focused, pure-play companies, allowing investors to invest directly in the business vertical of their choice. Each entity will have its own management team and capital structure.

Strategic Rationale for the Split

The primary motivation behind the demerger is to simplify the corporate structure and unlock the intrinsic value of each business segment. Management believes that standalone entities are easier for the market to value accurately, potentially removing the conglomerate discount that often affects diversified companies. This structure is also expected to provide better alignment of debt with the cash flows of each vertical, facilitate easier access to strategic partners for each business, and improve overall capital discipline and accountability.

Market Reaction and Stock Performance

Investor optimism surrounding the demerger and strong commodity prices has been reflected in Vedanta's stock performance. On April 2, 2026, the share price closed 1.54% higher at Rs 687.8 on the BSE, with a market capitalization of Rs 2,68,956.49 crore. The stock has delivered a 63% return over the past year and has gained 14.48% since the beginning of 2026. It reached its 52-week high of Rs 770 on January 29, 2026, a significant climb from its 52-week low of Rs 362 recorded on April 7, 2025.

Analyst Commentary and Price Targets

Brokerage firms have responded positively to Vedanta's operational performance and strategic initiatives. Nuvama Institutional Equities revised its target price for the stock upwards to Rs 806 from Rs 686, citing the value unlocking potential of the demerger and a strong commodity cycle. Similarly, Kotak Institutional Equities has set a target price of Rs 780 per share. Analysts project that nearly 85% of Vedanta's FY2027 estimated EBITDA will be driven by aluminium (50%), zinc (20%), and silver (15%), positioning it well to benefit from the ongoing commodities rally.

Future Outlook and Expansion Plans

Looking ahead, Vedanta's chairman, Anil Agarwal, has outlined ambitious growth plans for the demerged entities. The company aims to double its aluminium capacity from the current 3 million tonnes. In the oil and gas sector, the near-term goal is to increase production to 300,000 barrels per day. For silver, a key byproduct of its zinc operations, the plan is to significantly increase output from approximately 700 tonnes to 3,000 tonnes to cater to rising domestic demand.

Conclusion

Vedanta is currently at a pivotal juncture, marked by record-breaking operational performance and a transformative corporate restructuring. The strong Q4 FY26 production figures underscore the company's robust operational capabilities. As the demerger process moves towards its conclusion, investors will be closely watching for further announcements on the record date and listing of the new entities, which promises to unlock significant value and create a new growth trajectory for each of its core businesses.