VEDANTA ALUMINIUM METAL LTD Q2 CONCALL: $5 BN ANNUALIZED EBITDA EXIT RUN-RATE TARGET, $100–125/TONNE FY27 COST SAVINGS, BALCO CAPACITY EXPANSION, CAPTIVE MINING & STRONG PROFITABILITY

• Management targets approximately $5 billion in annualized EBITDA exit run rate by FY27-end, supported by production growth, value-added products and structural cost reductions. • Management clarified that the $5 billion target represents an annualized exit run rate and should not be interpreted as total FY27 EBITDA guidance. • Management indicated that achieving this target depends on prevailing LME aluminium prices, production expansion, higher product premiums and cost-saving execution. • Management expects aluminium and alumina production to increase approximately 3–5% sequentially in the coming quarters. • Management targets alumina production exceeding 1 million tonnes during Q3 FY27, supported by continued ramp-up at the Lanjigarh refinery. • Management expects Lanjigarh refinery output to increase approximately 10% sequentially in each of Q3 and Q4 FY27. • Management targets an approximately 85% captive alumina mix by FY27-end, reducing dependence on externally sourced alumina. • Management targets approximately 75% captive bauxite sourcing by FY27-end, compared with around 40% currently. • Management expects captive bauxite and alumina integration to generate approximately $100–125 per tonne in cost savings by the FY27 exit period. • Management identified structural cost-reduction initiatives with total potential savings of approximately $200 per tonne. • Management expects the remaining cost benefits to emerge over the following one or two quarters after the initial FY27 exit savings. • Management targets a longer-term hot metal production cost of approximately $1,550 per tonne, compared with $1,722 per tonne in Q2 FY27. • Management expects captive coal operations to contribute approximately $30–35 per tonne of additional aluminium cost savings as mining volumes increase. • Management cautioned that Q3 FY27 hot metal costs could increase approximately 4% QoQ due to planned power plant shutdowns and input-cost pressures. • Management expects H2 FY27 hot metal costs to remain broadly around H1 levels or slightly lower, depending on operational efficiencies and raw-material prices. • Management expects BALCO Potline 3 to achieve an annualized production run rate of approximately 435,000 tonnes by March 2027. • Management indicated that approximately 50% of BALCO Potline 3 pots were already in full production during Q2 FY27. • Management expects the remaining BALCO Potline 3 zones to be commissioned progressively through Q3 and Q4 FY27. • Management expects BALCO capacity expansion to support higher aluminium production and operating leverage over the coming quarters. • Management highlighted 525-kiloampere potline technology at BALCO as an important part of the capacity expansion. • Management indicated that BALCO Potline 3 had a historical capital intensity of approximately $2,100 per tonne of annual production capacity. • Management expects the Lanjigarh refinery expansion to increase internal alumina availability and strengthen backward integration. • Management targets approximately 1 million tonnes of bauxite production from the Sijimali mine during FY27. • Management targets approximately 5–6 million tonnes of bauxite production from Sijimali during FY28, subject to successful commissioning and operational ramp-up. • Management indicated that Sijimali has environmental clearance for approximately 9 million tonnes of annual bauxite production. • Management reported that consent to operate for Sijimali was obtained in September 2026. • Management estimated Sijimali's initial bauxite production cost at approximately $60 per tonne. • Management expects domestic Sijimali bauxite to provide estimated savings of approximately $25 per tonne of bauxite compared with imported material. • Management highlighted local stakeholder engagement as a critical requirement for scaling Sijimali mining operations. • Management expects captive coal availability to improve through the development of Kuraloi and Ghogharpalli mines. • Management indicated that Jamkhani is operating at approximately 2.5 million tonnes of coal production. • Management targets commencement of Ghogharpalli coal production by FY27-end or early FY28, subject to necessary approvals. • Management targets approximately 5 million tonnes of coal production from Ghogharpalli during FY28. • Management identified Radhikapur as a longer-term coal resource supporting future aluminium and power capacity expansion. • Management expects proximity to coal-producing regions to provide logistical cost advantages for Jharsuguda and BALCO operations. • Management is planning a large integrated greenfield expansion comprising approximately 3 MTPA of additional aluminium capacity and 6 MTPA of alumina refining capacity. • Management is seeking approximately 1,450 acres for the proposed aluminium smelter in the Kamakhyanagar–Dhenkanal region. • Management is seeking approximately 400 acres for the proposed alumina refinery at Kalyansinghpur. • Management indicated that engineering layouts have been prepared and that the proposed smelter configuration would replicate aspects of BALCO technology. • Management targets smelter capital intensity around $2,100 per tonne of annual capacity, excluding refinery and power infrastructure costs. • Management clarified that the greenfield expansion remains dependent on land allotment, regulatory approvals and project execution. • Management did not provide a final total capital expenditure estimate or definitive commissioning schedule for the proposed greenfield expansion. • Management aims to increase value-added aluminium products to more than 90% of its product mix over time. • Management expects a higher contribution from value-added products to support improved realizations and reduce dependence on commodity aluminium pricing. • Management targets more than 400 MW of renewable power capacity during FY27. • Management indicated that approximately 500 MW of renewable power capacity has been contracted through Serentica. • Management aims to increase renewable energy's contribution to approximately 25% of total power requirements by FY29–FY30. • Management expects renewable energy's share to reach approximately 10–12% after commissioning of the existing contracted capacity. • Management identified digital and AI-led operational initiatives with approximately $87 million in potential annualized efficiency benefits. • Management did not disclose a detailed breakdown of realized versus projected AI and digital cost savings. • Management expects domestic aluminium demand to remain healthy, particularly from power infrastructure, transportation and lightweighting applications. • Management expects global aluminium supply conditions to remain relatively tight during 2026. • Management cautioned that additional aluminium production from the Middle East and Indonesia could pressure international aluminium prices. • Management indicated that H2 aluminium premiums could be approximately $50 per tonne below the comparison level referenced during the call. • Management reported that approximately 22% of remaining FY27 aluminium volumes were hedged at an average price of $3,274 per tonne. • Management indicated that future cash generation could be allocated among debt reduction, expansion projects and shareholder dividends. • Management indicated a broad annual dividend yield range of approximately 3–5%, subject to future board decisions and financial conditions. • Q2 FY27 revenue increased 41% YoY and 5% QoQ to ₹22,066 Cr, supported by higher production volumes and improved product mix. • Q2 EBITDA increased 83% YoY to ₹10,192 Cr, although it declined approximately 3% sequentially. • Q2 EBITDA margin was approximately 46.2%, calculated from reported revenue and EBITDA. • Q2 profit after tax stood at ₹6,187 Cr, more than doubling compared with the corresponding previous-year period. • Management reported exceptional charges of approximately ₹400 Cr during Q2 FY27. • Return on capital employed stood at approximately 60%, reflecting strong reported profitability. • Aluminium production increased 5% YoY and 3% QoQ to a record 649,000 tonnes. • Alumina production increased 37% YoY and 8% QoQ to a record 895,000 tonnes. • Value-added aluminium production increased 31% YoY and 11% QoQ to 432,000 tonnes. • Value-added aluminium sales increased 30% YoY and 13% QoQ to 433,000 tonnes. • Domestic aluminium sales reached a record 338,000 tonnes during Q2 FY27. • Primary Foundry Alloy production increased approximately 46%, reflecting growth in higher-value aluminium products. • Billet production increased approximately 9%, supporting the company's value-added product portfolio. • Net earned aluminium premium increased to approximately $453 per tonne from $205 per tonne a year earlier. • Management indicated that improved product premiums, higher volumes and operating efficiencies helped protect profitability despite an approximately 10% sequential decline in LME aluminium prices. • Q2 hot metal production cost stood at approximately $1,722 per tonne, providing the baseline for planned cost-reduction initiatives. • Net debt declined approximately ₹3,090 Cr sequentially to ₹26,442 Cr. • Net debt to EBITDA improved to approximately 0.7 times from 0.9 times in Q1 FY27. • Cash and cash equivalents stood at approximately ₹6,318 Cr at the end of Q2 FY27. • Management cited cash flow of approximately ₹6,043 Cr during the period. • The company reported a dividend payout of approximately ₹3,190 Cr, equivalent to ₹8 per share. • Management reported refinancing more than ₹7,000 Cr of debt, supporting balance-sheet management. • Average term-debt maturity stood at approximately 4.1 years, with an average interest cost of around 8.5%. • Management reported AA+ stable credit ratings from ICRA and CRISIL, alongside an upgrade to AA+ stable from India Ratings. • Renewable power capacity increased from approximately 321 MW in Q1 to 367 MW in Q2 FY27. • The company highlighted fly-ash utilization in cement manufacturing and road construction as part of its sustainability initiatives. • The Odisha Mining Corporation bauxite pricing dispute remains before the Supreme Court, with management referring to a contingent interest demand of approximately ₹1,100–1,200 Cr. • Management indicated that the final financial impact of the OMC dispute remains uncertain and depends on the legal outcome. • Key risks include aluminium price volatility, Q3 power plant shutdowns, carbon and fuel inflation and delays in achieving planned cost reductions. • Additional risks include Sijimali community engagement, Ghogharpalli mining approvals, the OMC litigation and land and regulatory requirements for greenfield expansion. • Overall outlook remains positive, supported by record aluminium and alumina production, strong EBITDA growth, improving product premiums, lower leverage and backward-integration opportunities. • Key FY27 monitorables include BALCO Potline 3 commissioning, Q3 alumina production above 1 million tonnes, Sijimali bauxite ramp-up, captive coal progress and delivery of $100–125 per tonne in planned cost savings. • The approximately $5 billion annualized EBITDA exit run-rate ambition and $1,550 per tonne longer-term hot metal cost objective remain conditional on operational execution, commodity prices and raw-material integration. • The supplied source is a machine-generated earnings-call transcript, and its forward-looking figures represent management expectations rather than assured outcomes.

VEDANTA ALUMINIUM METAL L

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