Vedanta Targets 1x Debt Ratio by FY26 With Refinancing Push
ECONOMY & POLICY

Vedanta Targets 1x Debt Ratio by FY26 With Refinancing Push

Vedanta Ltd, promoted by Anil Agarwal, is aiming to reduce its net debt-to-EBITDA ratio to 1x by the end of the current financial year, supported by internal accruals, aggressive cost optimisation, and strategic refinancing efforts.
The diversified natural resources company recorded a net leverage of 1.3x at the end of Q1 FY26, improving from 1.5x in the same quarter last year.
According to Vedanta’s Chief Financial Officer, Ajay Goel, the group has already brought down its interest cost by 130 basis points over the past year, from 10.5 per cent to 9.2 per cent, and now targets a further reduction to 8.5 per cent by the close of FY26.
This deleveraging effort coincides with Rs 170 billion in debt maturing during the current fiscal. Goel stated that all of it is secured and will be managed through a mix of refinancing and operational cash flows.
Vedanta expects internal accruals of Rs 200–250 billion across group companies this fiscal. “We are open to internal accruals, refinancing, and opportunistic monetisation to meet obligations. The objective remains clear—cut interest costs and extend maturity timelines,” Goel noted.
During the quarter, Vedanta raised Rs 30.28 billion by selling a 1.6 per cent stake in subsidiary Hindustan Zinc Ltd (HZL), as part of its monetisation strategy.
This, alongside a Rs 50 billion non-convertible debenture issue and other refinancing moves, helped Vedanta achieve a 1.3x debt-to-EBITDA ratio.
Debt and Liquidity
Net debt stood at Rs 582.2 billion as of 30 June 2025, with 82 per cent denominated in rupees. The company ended FY25 with debt of Rs 532.5 billion.
In Q1 FY26, Vedanta incurred Rs 42.8 billion in dividend payouts, Rs 39.16 billion for working capital or borrowings, Rs 51.55 billion in capex, and Rs 29.53 billion in other additions. These were offset by operational cash flow and proceeds from the HZL stake sale, totalling around Rs 113 billion.
Cash and cash equivalents remained strong at Rs 221.37 billion, up 7 per cent quarter-on-quarter and 33 per cent year-on-year.
Financial Performance
Adjusted profit after tax (PAT) for Q1 FY26 was Rs 50 billion, a 13 per cent increase year-on-year. However, reported PAT dropped 13 per cent to Rs 44.57 billion due to a Rs 7.57 billion one-time write-off related to oil exploration under Cairn’s OALP.
Vedanta posted its highest-ever Q1 EBITDA of Rs 107.46 billion, driven by tight cost control and improved margins across key sectors.
Consolidated revenue from operations reached Rs 374.34 billion, up 6 per cent year-on-year, supported by better premia and forex gains, although tempered by weaker commodity prices. 

Vedanta Ltd, promoted by Anil Agarwal, is aiming to reduce its net debt-to-EBITDA ratio to 1x by the end of the current financial year, supported by internal accruals, aggressive cost optimisation, and strategic refinancing efforts.The diversified natural resources company recorded a net leverage of 1.3x at the end of Q1 FY26, improving from 1.5x in the same quarter last year.According to Vedanta’s Chief Financial Officer, Ajay Goel, the group has already brought down its interest cost by 130 basis points over the past year, from 10.5 per cent to 9.2 per cent, and now targets a further reduction to 8.5 per cent by the close of FY26.This deleveraging effort coincides with Rs 170 billion in debt maturing during the current fiscal. Goel stated that all of it is secured and will be managed through a mix of refinancing and operational cash flows.Vedanta expects internal accruals of Rs 200–250 billion across group companies this fiscal. “We are open to internal accruals, refinancing, and opportunistic monetisation to meet obligations. The objective remains clear—cut interest costs and extend maturity timelines,” Goel noted.During the quarter, Vedanta raised Rs 30.28 billion by selling a 1.6 per cent stake in subsidiary Hindustan Zinc Ltd (HZL), as part of its monetisation strategy.This, alongside a Rs 50 billion non-convertible debenture issue and other refinancing moves, helped Vedanta achieve a 1.3x debt-to-EBITDA ratio.Debt and LiquidityNet debt stood at Rs 582.2 billion as of 30 June 2025, with 82 per cent denominated in rupees. The company ended FY25 with debt of Rs 532.5 billion.In Q1 FY26, Vedanta incurred Rs 42.8 billion in dividend payouts, Rs 39.16 billion for working capital or borrowings, Rs 51.55 billion in capex, and Rs 29.53 billion in other additions. These were offset by operational cash flow and proceeds from the HZL stake sale, totalling around Rs 113 billion.Cash and cash equivalents remained strong at Rs 221.37 billion, up 7 per cent quarter-on-quarter and 33 per cent year-on-year.Financial PerformanceAdjusted profit after tax (PAT) for Q1 FY26 was Rs 50 billion, a 13 per cent increase year-on-year. However, reported PAT dropped 13 per cent to Rs 44.57 billion due to a Rs 7.57 billion one-time write-off related to oil exploration under Cairn’s OALP.Vedanta posted its highest-ever Q1 EBITDA of Rs 107.46 billion, driven by tight cost control and improved margins across key sectors.Consolidated revenue from operations reached Rs 374.34 billion, up 6 per cent year-on-year, supported by better premia and forex gains, although tempered by weaker commodity prices. 

Next Story
Infrastructure Transport

Centre Clears Rs 69.6 Billion Kaziranga Highway Expansion

The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has approved the widening and upgradation of the Kaliabor–Numaligarh section of NH-715 in Assam, including wildlife-friendly measures on the stretch passing through Kaziranga National Park. The 85.7 km project will be executed in EPC mode at an estimated cost of Rs 69.6 billion.The existing two-lane highway, which runs through Jakhalabandha (Nagaon) and Bokakhat (Golaghat), passes along the boundary of Kaziranga. Seasonal flooding often forces animals to cross the busy road towards the Karbi Anglong Hi..

Next Story
Infrastructure Urban

Govt Approves 57 New Kendriya Vidyalayas Worth Rs 58.6 Billion

The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has approved the establishment of 57 new Kendriya Vidyalayas (KVs) across India under the civil sector to meet the educational needs of children of Central Government employees. The total estimated outlay is Rs 58.6 billion over nine years from 2026–27, including Rs 25.9 billion for capital expenditure and Rs 32.8 billion for operational costs.For the first time, these schools will include Balvatikas (three years of foundational pre-primary stage) as part of the National Education Policy (NEP) 2020 fra..

Next Story
Infrastructure Urban

Govt Invites Proposals Under Rs 50 Billion Pharma-MedTech Scheme

The Department of Pharmaceuticals has opened applications for research and innovation projects under its Promotion of Research and Innovation in Pharma-MedTech Sector (PRIP) scheme, a landmark initiative aimed at transforming India into a globally competitive, innovation-led hub. With an approved outlay of Rs 50 billion, the scheme is expected to support around 300 projects, catalysing total R&D investment of about Rs 110 billion in new medicines, complex generics, biosimilars and novel medical devices.Revised guidelines have been issued to enhance the scheme’s effectiveness. For early-s..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?