OUR INVESTMENT CASE

CAPITALISING ON INHERENT ADVANTAGES TO DELIVER LONG-TERM VALUE

India’s natural resources industry is expected to contribute substantially to the country’s economy and have a significant impact on the international commodity markets. As India’s largest and most diversified natural resources company, we are wellpositioned to play a major role in supporting India’s economic growth. We are making the right investments for exponential growth. We have partnered with the government to promote inclusive development, raise environmental standards and build public support for the critical minerals and mining sector.

World-class natural resources powerhouse with low cost, long-life and diversified asset base

Vedanta’s large, diversified asset portfolio, with an attractive cost position in many of its core businesses, enables us to deliver strong margins and free cash flows through the commodity cycle. We have an attractive commodity mix, with strong fundamentals and leading demand growth with a keen focus on base metals and oil. Our cost positioning globally, across key segments, is driven by our resolute focus on structural cost reduction and operational efficiencies.

Vedanta continued its strong growth momentum and witnessed steady volume performance across all businesses, with aluminium and zinc delivering record performance.

Demand 2022-2030 CAGR (%)

Well-placed to contribute to and capitalise on India’s growth with an attractive commodity mix

India is our core market, with huge growth potential, given that the current per capita metal consumption is significantly lower than the global average. Also, India’s GDP, which registered a growth of 6.8% over the course of 2022, is expected to grow by 5.9% in FY 2024 (IMF; April 2023 estimate). Urbanisation and industrialisation, supported by government initiatives on infrastructure and housing, a strong response to COVID-19 and an increase in capital outlay announced in the Union Budget 2023-24 will continue to drive strong economic growth and generate demand for natural resources.

Vedanta’s unique advantages:

• Operating a wide and scalable portfolio of commodities that grow the nation
• A strong market position as India’s largest base metals producer and largest private sector oil producer
• An operating team with an extensive track record of executing projects and achieving growth

Source: Wood Mackenzie, IHS Markit, OPEC World Oil Outlook 2022
Note: All commodities' demand correspond to primary demand; figures are for 2022

India mineral reserves ranking globally

Source: IHS Markit

Proven track record of operational excellence with high productivity and consistent utilisation rates

• Our management team has diverse and extensive sectoral and global experience. Drawing from this deep insight, the team ensures that operations are run efficiently and responsibly
• Disciplined approach to development; achieving steady production growth across operations with a focus on efficiency and cost savings
• Since our listing in 2004, our assets have delivered a phenomenal production growth

Total Production Copper Equivalent (kt)

* All commodity and power capacities rebased to copper equivalent capacity (defined as production x commodity price/copper price) using average commodity prices for FY 2023. Power rebased using FY 2023 realisations, Copper custom smelting production rebased at TC/RC for FY 2023, Iron ore volumes refer to sales with prices rebased at realised prices for FY 2023

Focussed on digitalisation and innovation to drive efficiency and resilience

To optimise efficiency and ensure future-readiness in our operations, we are actively investing in Industry 4.0 technologies, and mainstreaming a digitalfirst culture throughout the organisation. This has helped to achieve a 100% digitally literate workforce, a consistent eye on tech-led innovation, strong collaboration with start-ups and partners and a continued unlocking of efficiency potential across our integrated value chain.

Project Pratham, aimed at significantly improving volume, cost and ease of doing business, has been a key step in this direction. Being implemented in partnership with global entities, it involves introducing emerging technologies throughout the Vedanta Industry 4.0 framework. The primary objectives of this project include EBITDA improvement, making gains on intangibles and reducing overall carbon footprint. Additionally, we are collaborating with technology start-ups, through the Spark programme, to leverage the power of cutting-edge technology for bringing large-scale impact.

Disciplined capital allocation framework with emphasis on superior and consistent shareholder returns

We have unveiled a structured capital allocation policy that prioritises growth and shareholder returns. The policy aligns three streams across capital expenditure, dividend policy and selective inorganic growth. It will be driven by a consistent, disciplined, and balanced allocation of capital with long-term balance sheet management, optimal leverage management and maximisation of total shareholder returns.

Robust financial profile with strong ROCE and cash flow and a stronger balance sheet

Our operating performance, coupled with the optimisation of capital allocation, has helped strengthen our financials:

• Revenues of ₹1,45,404 crore and EBITDA of ₹35,241 crore
• Strong ROCE of ~21%
• Deleveraging and extension of our debt maturities through proactive liability management exercises
• Strong and robust FCF (Post Capex) of ₹18,077 crore
• Cash and liquid investments of ₹20,922 crore
• A strong balance sheet, with respect to Net Debt/EBITDA and gearing, compared with our global diversified peers
• ₹37,730 crore of declared dividend in FY 2023

Committed to ESG leadership in the natural resources sector

• Being sustainable and the lowest cost producer in a sustainable manner
• Incorporated global best practices to transform communities, planet and workplace in alignment with our Group’s objective of ‘zero harm, zero waste and zero discharge’
• Implemented critical risk management across the business to improve workplace safety
• Promoting diversity at the workplace to build an inclusive work culture
• Attaining net zero carbon by 2050 and reducing absolute emissions by 25% by 2030 from the 2021 baseline. Levers being used for achieving this goal include 2.5 GW Round the Clock Renewable Energy (RE RTC) by 2030, promoting operational efficiency, changing fuel mix, decarbonisation of 100% of our Light Motor Vehicle (LMV) fleet by 2030 and 75% of our mining fleet by 2035, exploring greener business opportunities and development of a low carbon product portfolio
• Achieving water efficiency and net water positivity by 2030
• Retaining community welfare at the core of decision-making by implementing global best practices
• Positively impacting the lives of 100 million women and children through upskilling and education, nutrition and healthcare initiatives
• Improving transparency and completeness of disclosures in alignment with international best practices like GRI, TCFD etc.