Vedanta“s second-quarter results have met market expectations, showcasing a robust operational performance. Analysts suggest that the company is well-positioned to capitalize on the ongoing rebound in commodity prices while effectively advancing its deleveraging strategy.
Brokerages such as Nuvama, Citi, ICICI Securities, and Investec have maintained a positive outlook on Vedanta Ltd. They highlighted several factors contributing to this bullish sentiment, including the company”s manageable leverage levels, anticipated medium-term gains in aluminium prices on the London Metal Exchange (LME), volume growth, and expected reductions in production costs. Additionally, the impending completion of the demerger process was cited as a key element in their forecasts.
Nuvama noted that the emphasis on demerger is nearing fruition, buoyed by favorable trends in commodity pricing. The brokerage anticipates a significant increase in third-quarter earnings, projecting a 20 percent quarter-on-quarter rise in EBITDA for Q3 FY26, driven by higher prices, increased volume, and decreased aluminium production costs.
The firm has revised its FY27 EBITDA forecast for Vedanta upwards by 4 percent to INR 63,450 crore, attributing this adjustment to rising commodity prices. Meanwhile, Citi Research identified strong potential for aluminium prices on the LME, predicting an average price of USD 3,500 in 2027. The research team emphasized that aluminium is poised to benefit from structural trends related to energy transition and advancements in artificial intelligence.
Furthermore, Citi”s analysis incorporated higher projected prices for zinc, aluminium, and silver in FY27, which would enhance Vedanta”s earnings. They have increased their EBITDA estimates for FY26, FY27, and FY28 by 6 percent, 15 percent, and 16 percent, respectively, largely due to favorable projections for aluminium and zinc on the LME, as well as contributions from new power assets.
According to ICICI Securities, Vedanta stands to gain significantly from the current commodity cycle, with the aluminium segment expected to drive the majority of the company”s earnings. This growth is anticipated to stem from improved volumes, reduced costs, and possibly favorable LME dynamics in aluminium supply and demand. The power and zinc sectors are expected to provide supportive contributions.
Investec Bank PLC from the UK commented on the management”s effective execution regarding debt refinancing at Vedanta Resources, the parent company. This strategy suggests a potential reduction in yield demands as they approach FY27 or FY28. Investec also reported that Vedanta”s dividends for the first half of FY26 amounted to INR 23 per share, with an estimated additional dividend of INR 20 per share expected in the second half of FY26.
In terms of financial performance, Vedanta reported a 13 percent year-on-year increase in profit after tax, reaching INR 5,026 crore. The company”s EBITDA for the second quarter stood at INR 11,612 crore, representing a 12 percent growth year-on-year, with EBITDA margins expanding by 69 basis points to 34 percent.
