ICICI Securities has cut Vedanta's target price to ₹345 from ₹369, while maintaining a positive view on zinc and silver prices. The brokerage stated that Zinc India business would remain a key growth driver for the Anil Agarwal-led conglomerate, with Vedanta deriving 95% of its EBITDA from Zinc India, followed by Zinc International. This update comes as Motilal Oswal maintains a Neutral rating with a target price of ₹290 and Nuvama continues with a 'Buy' rating at ₹333 per share. The target price revisions reflect the company's strategic restructuring through demerger into five listed entities effective since May, which consist of Zinc India, Zinc International, Copper and Ferrochrome as major businesses.
Vedanta delivered exceptional Q1FY27 results with consolidated net profit surging 72% year-on-year to ₹5,473 crore, significantly outperforming expectations. The metal-to-mining conglomerate's EBITDA jumped 98% year-on-year to a record ₹8,469 crore, marking a 98% quarter-on-quarter growth. The EBITDA margin expanded 985 basis points to 57%, excluding the copper business, compared to 30.7% in Q4FY26 and 27.1% in Q1FY26. Revenue from operations rose 54% YoY to ₹24,205 crore from ₹15,754 crore in the year-ago period. As reported by Motilal Oswal, the revenue growth was supported by better volumes and favorable LME prices, with the zinc segment being among the strongest performers during the quarter. The company remains firm on its deleveraging plans and higher cash flows will support both its expansion plans and deleveraging efforts.
Following its strategic demerger into five listed entities effective since May, Vedanta's business segments showed mixed performance in Q1FY27. Zinc India reported EBITDA of ₹8,090 crore, rising 112% year-on-year due to elevated prices and lower cost of production, partially offset by lower volume. Zinc International's EBITDA stood at ₹250 crore, up 127% quarter-on-quarter, but down 41% year-on-year. Copper EBITDA stood at ₹11 crore, up 38% quarter-on-quarter, driven by improved copper realisation and higher wire rod sales. Ferro chrome reported EBITDA of ₹101 crore, up 15% QoQ. According to ICICI Securities, higher commodity prices have lifted EBITDA for the company and its demerged entities, with the brokerage expecting zinc's demand-supply dynamics to be in balance while silver prices are expected to remain higher for longer in the ₹2 Lakh range.
Despite strong operational performance, Vedanta's financial position shows mixed signals with net debt standing at ₹8,200 crore, including ₹5,600 crore cash held by Zinc India, down from ₹10,500 crore in the previous quarter. The company's growth strategy remains heavily dependent on Zinc India, with ₹5,000 crore of Vedanta's growth capex allocation earmarked for Zinc India, while total ₹7,000 crore FY27 growth capex is allocated for the consolidated business. ICICI Securities believes the next big catalyst could be the initiation of the Saudi copper project slated to begin from August 2026, though war-led delays could hinder the project. The brokerage maintains its bullish call on Zinc India and Zinc International, while noting that other businesses like Copper and Ferrochrome may take longer than expected to ramp up.
