Brokers Nuvama, Citi, ICICI Securities and Investec maintained a strong bullish stance on metals and natural resources major Vedanta Ltd.
They cited factors such as Vedanta Resources’ leverage at comfortable levels, potential upside for aluminum on the London Metal Exchange (LME), volume growth, likely lower costs and the likely completion of the demerger process as reasons for the bullish call.
Nuvama said Vedanta’s focus on splitting and supply is about to pay off, supported by commodity price tailwinds. The brokerage expects this to contribute to higher third-quarter profits.
“Q3 2026 EBITDA is likely to increase 20 percent quarter-on-quarter, driven by higher prices, volumes and lower aluminum production costs,” Nuvama said.
It increased Vedanta’s estimated FY27 EBITDA by 4 percent to Rs 63,450 crore, taking into account higher commodity prices. Citi Research saw the potential medium-term upside for aluminum on the LME as a positive. Our commodities team expects aluminum to average USD 3,500 by 2027. Aluminum has bullish fundamental exposure to structural energy transition and AI trends and is being leveraged for a recovery in cyclical growth and the US economy. Concerns about relegation are likely to support the dovish Fed outlook in 2026, associated lower US real rates and a rebound in US and global growth expectations.
In its analysis, Citi factored in higher zinc, aluminum and silver prices in FY27, which will boost Vedanta’s profits.
“We are pricing FY27 zinc/aluminium/silver at USD2,850/USD2,800/USD40 versus USD2,700/USD2,600/USD38 previously. We are increasing FY26/FY27/28 EBITDA by 6 percent, 15 percent and 16 percent, largely due to higher aluminum and zinc LME and electricity EBITDA (commissioning of new assets),” it said.
According to ICICI Securities, Vedanta is one of the key beneficiaries of the commodity cycle, with the company’s aluminum division continuing to post strong profits at higher LME prices.
“The aluminum division is expected to generate the bulk of profits, helped by better volumes, lower costs and possibly better LME (aluminium supply and demand are likely to be favourable). The energy segment and zinc will play a supporting role,” the broker said.
Stating that Vedanta is purely a commodity play, ICICI Securities noted that the mining giant is likely to be the biggest beneficiary of a rally in commodity prices.
“Aluminium, zinc and silver contribute over 80 percent of EBITDA, and the company has good growth plans for these segments, which could keep the growth story intact. Moreover, the aluminum segment would be backward integrated into bauxite-alumina-coal, which would make Vedanta one of the cheapest producers,” the report said.
Britain-based Investec Bank PLC said the debt refinancing execution by Vedanta Resources, the company’s parent, is notable, implying declining interest demand in FY27 or FY28.
Investec also noted that Vedanta’s dividends stood at Rs 26 per share in the first half of the year, with the brokerage estimating an incremental dividend of Rs 20 per share in the second half of FY26.
Vedanta’s profit after tax before exceptional items rose 13 percent year-on-year to Rs 5,026 crore. The company posted an EBITDA of Rs 11,612 crore in the second quarter, reflecting 12 percent YoY growth, while EBITDA margin grew 69 basis points YoY to 34 percent.
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