Vedanta Q2 revenue, Ebitda hit record; brokerages see strong H2 outlook

'Mining major Vedanta posted its highest-ever second-quarter revenue and earnings before interest, tax, depreciation and amortisation (Ebitda) in the September quarter of financial year 2026 (Q2FY26), buoyed by firm commodity prices, higher volumes and operational gains. 

 

Brokerages remained positive on the company’s prospects, with most expecting a strong second half (H2FY26) driven by expansion and cost efficiencies, even as views diverged on near-term valuations.

Brokerages upbeat on Vedanta outlook

 

Nuvama Institutional Equities (Nuvama) said Vedanta reported a consolidated adjusted Ebitda of ₹11,610 crore, up 8 per cent sequentially, in line with its estimate of ₹11,590 crore, aided by higher metal prices, partly offset by elevated cost of production (CoP). The aluminium segment contributed nearly 48 per cent to the consolidated Ebitda.

 

“Q3FY26 Ebitda is likely to jump ~20 per cent Q-o-Q led by higher prices, volume and lower aluminium CoP,” the brokerage said. It expects NCLT approval for Vedanta’s proposed demerger by the end of Q4FY26, which could unlock value. Nuvama also sees the potential for an additional ₹10-12 dividend per share in the second half. “Net debt/Ebitda ex-HZ shall fall to 2x by end-FY26 (FY25: 2.7x),” it said, maintaining a ‘Buy’ rating with a revised target price of ₹686 (from ₹601).

 

Motilal Oswal Financial Services (Motilal Oswal) said Vedanta’s Q2 performance was better than expected, led by the aluminium business. It raised its FY26 revenue, Ebitda, and PAT estimates by 4 per cent, 2 per cent, and 4 per cent, respectively, factoring in the earnings beat and stronger near-term outlook, while largely retaining FY27 forecasts.

 

“Capex plans are progressing well and will likely lead to further cost savings,” the brokerage said, adding that the company’s focus on value-added products and deleveraging remains on track. Vedanta trades at 5.7x EV/Ebitda and 3.4x P/BV on FY27 estimates, it noted. Motilal Oswal reiterated its ‘Neutral’ rating with a sum-of-the-parts-based target price of ₹550.

 

Those at CLSA reportedly maintained their ‘Buy’ rating on the Vedanta stock with a target price of ₹580, noting that Q2 Ebitda was in line with estimates. The brokerage said Vedanta guided for FY26 Ebitda of over $6 billion, supported by higher commodity prices and operational gains. 

 

It expects expansion and backward integration across aluminium, power, and zinc to drive growth ahead. CLSA also pointed out that Parent Vedanta Resources debt [is] well funded and reiterated that the demerger completion by the end of FY26 remains on track.  ALSO READ | 'Market coupling' poses threat to IEX, says Nuvama; assigns 'Reduce' tag

Record quarterly performance

 

Vedanta’s consolidated revenue for Q2FY26 rose 6 per cent Y-o-Y to ₹39,218 crore, while Ebitda jumped 12 per cent Y-o-Y to ₹11,612 crore, with margins expanding 69 bps to 34 per cent. Profit before exceptional items rose 13 per cent Y-o-Y to ₹5,026 crore. Net debt/Ebitda improved to 1.37x, and the company’s credit rating was reaffirmed at ‘AA’.

 

In the first half of FY26, Vedanta reported record revenue of ₹76,652 crore (up 6 per cent Y-o-Y) and Ebitda of ₹22,358 crore (up 8 per cent Y-o-Y). Capex for H1 stood at $0.9 billion, while return on capital employed improved by 347 bps to 26 per cent.

Management confident of strong FY26

 

Arun Misra, executive director, Vedanta, said, “Our H1FY26 performance reflects Vedanta’s resilience. We delivered 8 per cent Y-o-Y Ebitda growth in a period marked by uncertainties and lower prices of key commodities that we deal with versus the annual average of FY25. This performance is on the back of our disciplined approach, focusing on volume growth and cost reduction across businesses. We delivered record production of Aluminium, Alumina, Zinc MIC in our international operations, Pig Iron and power generation. Alongside, we delivered strong progress on new projects, including commissioning of 1.3 GW of new power plant capacities, first metal production from new BALCO smelter, first alumina from 1.5 MTPA train 2 at Lanjigarh refinery and start of 160 KTPA Roaster at Debari.” 

 

“Supported by this increased production capacity and the recovery in commodity prices, Vedanta is well positioned to deliver its best performance in FY26, with full year Ebitda surpassing the historic best Ebitda of $6 billion delivered in FY22,” Misra added.