S&P Global Boosts Vedanta Resources To ‘B-‘ Amid Capital Structure And Liquidity Improvements

Vedanta Resources

VRL has been significantly deleveraging its balance sheet leading to robust a capital structure that supports sustainable growth over the long term.

S&P estimates Vedanta Resources Limited (VRL) EBITDA for fiscals 2025 and 2026 to be in the range of US$5.5 billion – US$6.0 billion annually.

Upgrade in Credit Rating factors that VRL has sufficient internal resources to meet debt maturities until December 2025

Estimate that the debt at the Vedanta Resources level could decline by another US$1 billion to about US$4.5 billion over the next 12 months: S&P

LONDON: Vedanta Resources Limited (“VRL or the company”), the world’s leading natural resources, energy, and technology conglomerate today announced that S&P Global Ratings (“S&P”) has upgraded its ratings from ‘CCC+’ to ‘B-‘ citing the company’s improving capital structure and liquidity while assigning a stable outlook.

The rating upgrade reflects VRL’s strong credit profile with a long-standing record of delivering superior performance and healthy free cash flows. VRL has been significantly deleveraging its balance sheet leading to a robust capital structure that supports sustainable growth over the long-term.

S&P revised its estimates on VRL’s earnings, estimating the EBITDA for fiscals 2025 and 2026 to be in the range of US$5.5 billion – US$6.0 billion annually.

The rating agency also estimates the debt at the Vedanta Resources level to decline by another US$1 billion to about US$4.5 billion over the next 12 months. It also estimates interest expenses at the Vedanta Resources level to drop to US$550 million–US$600 million by the end of fiscal 2025 (ending March 31, 2025).

S&P noted in its research update that VRL has adequate internal funds to meet US$1.4 billion of debt maturities due by the end of 2025. The stable outlook reflects our view that the company will proactively address the maturity of US$1.2 billion of debt in April 2026, the firm said in its research update.

Key factors noted by S&P in its research update include:

VRL’s strengthening cash flow position and the recent increase in the valuation of Vedanta Ltd. shares improve funding flexibility.

VRL’s earnings are benefitting from favorable product prices and cost-reduction initiatives, particularly in the aluminum business.

S&P expects zinc EBITDA to increase by about 25% and aluminum by almost 50% in fiscal 2025.

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