New Delhi: Mining conglomerate Vedanta is expected to post a 16 per cent compound annual growth in EBITDA through FY28, supported by new capacity additions, rising volumes in aluminium, zinc and power, and lower aluminium production costs, according to brokerage Nuvama.
The company’s recently commissioned assets, stable commodity prices and focus on “demerger, delivery and deleveraging” are seen strengthening earnings. Nuvama said a favourable NCLT ruling on Vedanta’s demerger by end-Q4 FY26 and clarity following the company’s decision not to buy JP Associates are additional triggers for the stock. Consolidated net debt is projected to fall to Rs 61,000 crore by FY27-end.
Vedanta has invested $0.9 billion in growth capex in H1 FY26 and is on track to meet its upgraded full-year capex guidance of $1.7–1.9 billion.
The company is demerging into five listed entities to allow investors to choose specific commodity exposures and unlock value through better valuations of businesses such as aluminium, steel and power.
By Q2 FY26, Vedanta had commissioned a 1,600-MW power plant, a 1.5-million-tonne alumina refinery and a 435,000-tonne aluminium smelter, with benefits expected from Q3. Key upcoming projects include a 200,000-tonne zinc expansion at Zinc International and a 600-MW power plant due by H1 FY27.
Earnings visibility in the power segment has improved after a 500-MW power purchase agreement with the Tamil Nadu discom.
Nuvama expects FY26–28 volume CAGR of 6 per cent in aluminium, 29 per cent in Zinc International and 18 per cent in power, with aluminium production costs likely to fall to $1,630 per tonne by FY28. It assumes average FY27–28 LME prices of $2,700 per tonne for aluminium, $2,850 for zinc and $40 per ounce for silver.
Across segments, power EBITDA is forecast to grow at 51 per cent CAGR helped by new capacity in Andhra Pradesh and Chhattisgarh. Zinc International EBITDA is projected to grow 40 per cent annually, and aluminium EBITDA 25 per cent on higher prices and efficiency gains.
JP Morgan has also projected a stronger H2 FY26 for Vedanta, citing lower alumina costs, higher LME prices and a strong dividend yield. Vedanta plans major expansions over the next two years. Agencies