Tag: Hindustan Zinc

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Vedanta Shines Bright: Brokerages Predict Strong Earnings on Aluminium Boom, LME Upside

Tanisha Cardozo

Major global and Indian brokerages remain upbeat on Vedanta Ltd.’s earnings outlook into FY26 and FY27, with analysts highlighting rising LME prices, aluminium vertical integration, INR depreciation, and new project launches as key tailwinds for the diversified natural resources company.

J.P. Morgan reported that Vedanta’s Q1 consolidated EBITDA was broadly in line with estimates, but several segments—including Aluminium, Oil & Gas, and Power—outperformed expectations, leading to a segmental EBITDA beat. “LME prices have bottomed and are expected to trend higher into FY26–27,” the firm said, noting that vertical integration in aluminium production will enhance cost competitiveness.

Citi Research echoed similar optimism, pointing to Vedanta’s parent company’s (Vedanta Resources) stable leverage, limited global aluminium supply growth, and the upcoming demerger as positive catalysts. The firm sees medium-term upside driven by favourable pricing and volume increases.

Mumbai-based Nuvama Institutional Equities expects Vedanta to post 10%+ QoQ EBITDA growth in Q2FY26, driven by improved pricing and lower aluminium production costs. “We see net debt/EBITDA (excluding Hindustan Zinc) falling to 1.7x by FY26-end from 2.7x in FY25,” Nuvama said, reaffirming its ‘BUY’ rating with a target price of ₹601. All major projects, except coal blocks, are expected to be commissioned in the current fiscal year.

UK-based Investec noted the company’s advantageous position amid a weakening Indian Rupee. Lower alumina prices and attractive yields were also highlighted as near-term positives.

Additional support came from Kotak Institutional Equities and IIFL, which emphasized cost-efficiency measures and deleveraging at both Vedanta Ltd. and Vedanta Resources.

🔹 Financial Highlights:

  • Adjusted PAT rose 13% YoY to ₹5,000 crore
  • Q1FY26 EBITDA reached ₹10,746 crore, the highest-ever first-quarter EBITDA, marking a 5% YoY growth

🔹 Strategic Developments Ahead:

  • Commissioning of aluminium expansion projects in Q2FY26
  • Expected demerger completion by Q4FY26
  • Cost reduction and vertical integration across business verticals

📊 Analyst Sentiment: Strong Buy

With positive cues from international commodity markets and a strategic focus on expansion and cost optimization, Vedanta appears well-positioned to capitalize on macro and sectoral tailwinds.

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Vedanta’s Credit Ratings Reaffirmed by CRISIL and ICRA; Markets Rebound After Short-Seller Allegations

allycaralgoa

India’s top credit rating agencies, CRISIL Ratings and ICRA, have reaffirmed the credit ratings of Vedanta Limited and its group companies, signaling sustained confidence in the group’s financial health, operational strength, and governance integrity.

CRISIL reaffirmed:

  • AAA for Hindustan Zinc Ltd
  • AA for Vedanta Ltd

ICRA similarly reaffirmed Vedanta’s AA rating, highlighting its improved leverage profile and operational efficiency.

These ratings come amid allegations made by short-seller Viceroy Research that targeted Vedanta Resources Ltd (VRL), the parent of Vedanta Ltd, accusing it of structural subordination and excessive reliance on dividends.

CRISIL, in its official statement, noted:

“The Vedanta management in response, via its press release dated July 9, 2025, has dismissed all the charges. Crisil notes that the stock prices for Vedanta Limited and Hindustan Zinc Limited have recovered since the report’s publication.”

CRISIL Ratings has outstanding ratings for 11 Vedanta group entities including ESL Steel Ltd, Talwandi Sabo Power Ltd, and Sesa Resources Ltd—all of which have been reaffirmed.

The agency also emphasized:

“Crisil keeps all its outstanding ratings under continuous surveillance. The ratings continue to be supported by the strength of the business risk profiles of their Indian operations and healthy financial performance.”

ICRA highlighted the Group’s commitment to debt reduction, with leverage improving to 2.5x in FY2025, compared to 3.2x in FY2024. It expects profitability in core verticals like aluminium and zinc to further improve financial metrics.

The agencies’ top-tier ratings refute Viceroy’s claims, instead showcasing Vedanta’s resilience, credibility, and capacity to meet all financial obligations. The recent refinancing of VRL’s debt has further smoothed maturity profiles and is expected to reduce finance costs starting FY2026.

What Do These Ratings Mean?

  • AAA (for Hindustan Zinc): Highest safety, lowest credit risk
  • AA (for Vedanta): High safety, very low credit risk

These ratings are a clear marker of Vedanta’s stability, particularly at a time when market speculation sought to cast doubt. The reaffirmation is not just symbolic—it is a robust endorsement from industry watchdogs that know the numbers best.