Vedanta shares rally 3% post Q2 earnings; analysts give thumbs up to numbers; higher prices for zinc, aluminium, silver to boost earnings

The stock jumped as much as 3.2% to ₹509.35 on the NSE in the early trade.

Vedanta’s consolidated net profit plunged 58.69% year-on-year (Y-o-Y) to ₹1,798 crore in the second quarter of 2025-26 (Q2FY26), dragged down by exceptional losses booked during the period under review.

The company had reported a net exceptional gain of ₹1,160 crore in Q2FY25.

The exceptional loss included a write-off of ₹1,407 crore in Talwandi Sabo Power (TSPL), a wholly owned subsidiary of Vedanta, pursuant to a Supreme Court order dated August 19.

A review petition by TSPL is pending in court, but the amount has been considered non-recoverable.

On the other hand, it also includes a settlement payment of ₹660 crore to SEPCO Electric Power Construction Corporation. Its revenue rose by 5.94% to ₹39,868 crore in the quarter under review.

According to the company’s earnings release, revenue was driven by higher London Metal Exchange (LME) premia and forex (foreign exchange) gain, partly offset by lower volume.

“This has been largely driven by cost reduction efforts and supported by metal prices, while on volumes, we could have done better.

What analysts say

A PTI report on November 2 said that Vedanta's second-quarter results met street expectations on robust operational performance, with analysts viewing the miner as well-positioned to benefit from the commodity rebound while advancing its deleveraging strategy.

Financial services firms Nuvama, Citi, and Investec maintained a strong bullish stance on metals and natural resources major Vedanta Ltd.

They cited factors such as Vedanta Resources' leverage being at comfortable levels, potential medium-term upside in aluminium 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 demerger and delivery is on the verge of paying off, supported by tailwinds from commodity prices. The investment firm expects this to contribute to higher third-quarter earnings.

"Q3 FY26 EBITDA is likely to jump 20% QoQ led by higher prices, volume, and lower aluminium cost of production," Nuvama said.

It increased Vedanta's FY27 estimated EBITDA by 4% to ₹63,450 crore, factoring in higher commodity prices.

Citi Research saw potential medium-term upside for aluminium on the LME as a positive factor.

"Our commodities team expects aluminium to average $3,500 in 2027. Aluminium has bullish fundamental exposure to structural energy-transition and AI trends and is leveraged to a cyclical growth rebound and US debasement concerns. During 2026, dovish Fed prospects, related lower US real interest rates, and a pickup in the US and global growth expectations are likely to be supportive," it said.

In its analysis, Citi factored in higher prices for zinc, aluminium, and silver in FY27, which will boost Vedanta's earnings.

"We incorporate FY27 zinc/aluminium/silver at $2,850/ $2,800/ $40 vs $2,700/ $2,600/ $38 earlier. We raise FY26/FY27/28 EBITDA by 6%, 15% and 16%, largely on higher aluminium and zinc LME and power EBITDA (commissioning of new assets)," it said.

Other analysts note that Vedanta is a prime beneficiary of the commodity cycle, with the company's aluminium division continuing to deliver strong earnings amid higher LME prices.

UK-based Investec Bank PLC said that the management execution on debt refinancing at Vedanta Resources - the company's parent firm - is noteworthy, implying a tapering yield ask into FY27 or FY28.

Investec also noted that Vedanta's dividends in 1HFY26 stood at ₹23 per share, with the firm estimating an incremental dividend of ₹20 a share in H2 FY26.