Vedanta Earnings Preview: Profit Dip Expected Amid Revenue and EBITDA Growth

Vedanta Limited is scheduled to announce its financial results on Friday, October 31.

The company's performance is significantly influenced by its subsidiary, Hindustan Zinc, which contributes nearly 40% of Vedanta's Earnings Before Interest and Tax (EBIT).

According to a CNBC-TV18 poll, Vedanta's net profit is projected to fall by 38% year-on-year to ₹3,464 crore. This decline is largely attributed to an exceptional gain of ₹1,800 crore recorded in the same quarter last year.

Despite the profit dip, revenue is anticipated to increase by 1.6% to ₹38,250 crore, and Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) could grow by 8% to ₹10,590 crore.

EBITDA margins are expected to expand from 26.11% to 27.69%, driven by robust commodity prices.

Strong prices on the London Metal Exchange (LME), with Aluminium and Zinc prices up 7% sequentially, are expected to support these segments, even as volumes for Zinc India and Aluminium remain flat and the oil business sees lower volumes.

Vedanta's Aluminium business is poised for strong results, with an increased mix of captive alumina helping to keep production costs stable sequentially, despite higher power costs. The full benefits of this captive alumina strategy are expected from the second half.

The Oil & Gas segment's EBITDA, however, is likely to decrease due to reduced volumes.

Investors will also be watching for updates on volume and margin expansion projects, the status of the demerger, parent company cash flow, debt repayment schedules, and FY26 production, cost, and capital expenditure guidance.

Shares of Vedanta were trading down 1.8% at ₹507 ahead of the results.

Impact: These results are crucial for Vedanta Limited's stock performance and could influence investor sentiment towards the broader metals and mining sector in India. A stronger-than-expected EBITDA or positive outlook might boost the stock, while a significant miss or concerning guidance could lead to a sell-off. Impact Rating: 7/10

Difficult terms: EBIT (Earnings Before Interest and Tax): A measure of a company's operating profit, excluding interest expenses and income taxes. EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation): A measure of a company's operating performance, used to evaluate profitability by removing the effects of financing decisions, accounting decisions, and tax environments. EBITDA Margin: Calculated by dividing EBITDA by revenue, it indicates the profitability of a company's core operations before accounting for certain expenses. LME (London Metal Exchange): The world centre for industrial metals trading. Prices on LME often set the global benchmark. Captive Alumina: Alumina produced by a company for its own internal use (e.g., in its aluminium smelters) rather than for sale on the open market.