For over a year now, Vedanta’s much talked about demerger plan has kept Dalal Street buzzing. The question now is when is the demerger likely? Billionaire Anil Agarwal’s mining to metals giant has indicated that the long anticipated split of Vedanta into five separate entities is firmly on track and is potentially expected by September this year.
Vedanta demerger update
Vedanta’s demerger will carve out four new companies from the parent Vedanta Limited, which will continue to exist as the fifth entity. The newly formed include –
- Vedanta Aluminium Metal
- Vedanta Power
- Vedanta Oil & Gas
- Vedanta Iron and Steel Limited
Each of these will be listed on the stock exchanges. For every share held in Vedanta, eligible shareholders will receive one share in each of the four new companies. The record date to determine eligibility will be announced soon.
According to Vedanta CFO Ajay Goel, the company is “on track” to complete the process by the end of Q2 FY26, which means September 2025.
Vedanta Q4 results: 5 key highlights
Even as the company prepares for a major transformation, its numbers for the fourth quarter of FY25 are as follows-
- Vedanta posted its highest ever consolidated revenue of Rs 39,789 crore in Q4FY25
- Profit attributable to shareholders shot up by 154% YoY to Rs 3,483 crore, compared to Rs 1,549 crore in Q4FY24.
- Consolidated EBITDA rose 30% to Rs 11,618 crore, with the margin hitting a 12-quarter high.
- Pre-capex free cash flow stood at Rs 7,814 crore, while cash and cash equivalents jumped 34% year-on-year.
- Profit after tax came in at Rs 4,961 crore, up 2% from the previous quarter.
Vedanta: Retains ‘Buy’ with Rs 607 target
The brokerage firm Nuvama remains bullish on the company. In its latest report, Nuvama has maintained a ‘Buy’ rating on Vedanta, citing strong prospects in the aluminium business, steady debt reduction, and expected earnings growth over the next two years.
According to the brokerage report, net debt (excluding Hindustan Zinc and including buyers’ credit) peaked in Q3FY25 and has since declined by Rs 1,130 crore, standing at Rs 68,400 crore at the end of Q4.
The brokerage expects this number to further drop to around Rs 61,600 crore by the end of FY26.
While Vedanta had earlier indicated the demerger could conclude by the end of Q2FY26 (September 2025), the brokerage however hints that regulatory hurdles might delay the process.
“Demerger of the business may be delayed beyond Q2FY26 as it is seeking regulatory approvals,” the brokerage noted.
Furthermore, the brokerage house sees aluminium as Vedanta’s biggest growth engine in the coming years. The brokerage expects a 25% CAGR in aluminium EBITDA between FY25 and FY27, with volume expansion and lower costs pushing the business into the first decile of the global cost curve by FY28.
“We believe the aluminium segment will be the biggest growth driver… and the company will position itself in the first decile of the world cost curve by FY28E,” the report said.
“We retain our positive stance on VEDL amid company-specific triggers such as deleveraging, high dividend and EBITDA growth due to cost reduction and volume growth in aluminium and zinc from FY26,” the note added.