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News Topical, Digital Desk : The second quarter results of Vedanta Ltd., the country's metals and natural resources company, met market expectations. Brokerages expect Vedanta to benefit significantly from the recovery of commodity markets due to its strong operational performance. Furthermore, the company is rapidly advancing its deleveraging strategy.
Brokerages Nuvama, Citi, ICICI Securities, and Investec have maintained a bullish stance on Vedanta. They stated that Vedanta Resources' leverage is at a comfortable level, aluminum prices on the London Metal Exchange (LME) are expected to rise, volume growth is strong, costs are expected to decline, and the company's demerger process is in its final stages.
Nuvama stated that Vedanta's focus on the demerger and delivery is now positioned to yield benefits, supported by strong commodity prices. The brokerage estimates Vedanta's EBITDA to grow 20% QoQ in the third quarter, supported by higher prices, higher volumes, and lower aluminum production costs. The company has raised its FY27 EBITDA estimate by 4% to ₹63,450 crore. Citi Research says that a medium-term increase in aluminum prices on the LME is possible. They estimate that the average aluminum price could reach $3,500 per tonne in 2027. Citi said that aluminum will benefit from structural trade initiatives such as the energy transition and artificial intelligence (AI).
Aluminum and silver will benefit . Citi assumes higher prices for zinc, aluminum, and silver for FY27, saying this will boost Vedanta's earnings. They have increased their EBITDA estimates for FY26, FY27, and FY28 by 6%, 15%, and 16%, respectively. ICICI Securities said that Vedanta is a major beneficiary of commodity prices. The company's aluminum division has consistently delivered strong earnings, and higher LME prices are expected to further improve this. The report stated that the aluminum segment will remain the major contributor, while the power and zinc segments will play supporting roles.
Stock Performance: The company's shares closed down 2.50% at ₹494.30 on Friday. Over the past year, the company's stock has gained 7.74%.
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