Vedanta Aluminium Metal Limited has approved definitive agreements with Serentica Renewable India 9 Private Limited (SRI9PL) to integrate a 150 MW Battery Energy Storage System (BESS), aiming to secure reliable round-the-clock renewable power and reduce dependence on conventional energy sources. The Board of Directors approved the execution of these agreements on July 30, 2026, as part of the company’s broader decarbonization roadmap and regulatory compliance strategy.

The transaction involves an investment of INR 165 Crore by Vedanta Aluminium Metal Limited, representing a 26% equity stake in the project special purpose vehicle (SPV). This infusion aligns with group captive provisions under applicable regulations. The remaining equity in the SPV will be held by Serentica Renewables India Private Limited, a fellow subsidiary or its affiliates. The project is structured on a Build-Own-Operate-Maintain (BOOM) basis, with power supply agreements extending for 25 years from the date of commissioning.

Project Structure and Timeline

The BESS project utilizes the existing 600 MW Solar Power Delivery Agreement (PDA) to convert the current solar power arrangement into a round-the-clock (RTC) renewable solution. This integration ensures a 95% assured supply, providing critical power during non-solar hours. The SPV is expected to commence power delivery within 12 months of signing the PDA. The project financing follows a 70:30 debt-to-equity ratio.

Strategic Rationale

The primary objective of this acquisition is to mitigate reliance on higher-cost conventional power procured through power exchanges. By securing long-term renewable energy during non-solar hours (1800 to 0800 hours), the company aims to stabilize energy costs and support its Environmental, Social, and Governance (ESG) initiatives. The contracted capacity includes up to 250 MW during solar hours (0800 to 1800 hours) and 150 MW during non-solar hours.

What the Numbers Show

The move highlights a strategic shift towards captive renewable infrastructure to hedge against volatile power exchange prices. By locking in a long-term tariff independently benchmarked against prevailing market rates for renewable energy, Vedanta Aluminium Metal Limited secures cost predictability. The 26% equity participation allows the company to retain control over its energy supply chain while leveraging partner expertise for project development and operation.

The Board meeting commenced at 01:20 p.m. IST and concluded at 02:18 p.m. IST. The disclosure was made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with Schedule III thereto. All requisite governmental and regulatory approvals will be sought as applicable.

Vedanta Aluminium Metal Limited reported a net profit of ₹6,597 crore for the quarter ended June 30, 2026, marking a 205% year-on-year surge driven by record revenue and expanded operating margins. This inaugural quarter as an independent entity saw the company achieve its highest-ever quarterly revenue of ₹21,105 crore, reflecting robust demand and improved realizations. The strong financial performance underscores the company’s competitive positioning in the global aluminium market, with EBITDA jumping 134% YoY to ₹10,499 crore.

The Board of Directors approved these unaudited consolidated and standalone financial results during a meeting held on July 30, 2026. Alongside the results, the Board declared a maiden interim dividend of ₹8 per share. The meeting commenced at 01:20 p.m. IST and concluded at 02:18 p.m. IST. Company Secretary Dashmeet Rana signed off on the disclosure, which was subsequently submitted to the BSE and NSE.

Financial Performance

Revenue from operations reached ₹21,105 crore in Q1FY27, up 45% YoY and 13% QoQ. This growth was supported by higher volumes and favorable marketing contributions. EBITDA stood at ₹10,499 crore, representing a best-ever EBITDA margin of 50%, up from 31% in the same period last year. The margin expansion was primarily driven by cost efficiency and increased value-added product (VAP) mix, partially offset by input commodity inflation.

Profit before tax rose to ₹8,832 crore, up 205% YoY. Finance costs remained flat YoY at ₹1,001 crore, while depreciation and amortization increased by 11% YoY to ₹775 crore due to asset capitalization. The effective tax rate for the quarter was approximately 25%.

Operational Highlights

Aluminium production hit an all-time high of 632 KT, increasing 5% YoY and 3% QoQ. This was largely aided by higher volumes from the new BALCO smelter. Value-added product production also reached a record 389 KT, up 14% YoY. Alumina production stood at 826 KT, a 41% YoY increase, driven by enhanced refining capacity and asset utilization. The company achieved best-ever alumina purity of 98.81%, placing it among the top three alumina refineries globally.

What the Numbers Show

The divergence between revenue growth (45% YoY) and EBITDA growth (134% YoY) highlights significant operational leverage achieved in Q1FY27. While revenue expanded due to volume and price tailwinds, the disproportionate rise in EBITDA indicates that cost efficiencies and the shift toward higher-margin value-added products contributed more substantially to profitability than top-line growth alone. Additionally, the improvement in Net Debt to EBITDA ratio to 0.9x from 1.3x in Q4FY26 demonstrates accelerated deleveraging, supported by strong cash flows from operations.

Strategic and ESG Updates

Vedanta Aluminium received credit rating upgrades to AA+ (Stable) from both CRISIL and ICRA, reflecting its strengthened balance sheet. The company also secured mining lease and mine opening permissions for the Kuraloi (A) North Coal Block, with environmental clearance granted for the Sijimali Bauxite Mine. On the ESG front, renewable energy consumption rose 38% YoY to 701 million units, and the Lost Time Injury Frequency Rate (LTIFR) dropped 80% QoQ to 0.04.