Vedanta Q2 Results: Strong LME prices may offset weak volumes; Demerger timeline in focus

Vedanta Ltd., the Anil Agarwal owned mining conglomerate will be reporting results on Friday, October 31. Its subsidiary Hindustan Zinc has already reported results and nearly 40% of the company's Earnings Before Interest and Tax (EBIT) comes from Hindustan Zinc.

A CNBC-TV18 poll expects Vedanta's net profit to decline by 38% from last year to ₹3,464 crore. The decline is due to an exceptional gain of ₹1,800 crore in the base quarter which needs to be factored in.

Revenue for the quarter is likely to increased by 1.6% from last year to ₹38,250 crore, while Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the quarter may increase by 8% year-on-year to ₹10,590 crore.

EBITDA margin for the quarter may expand to 27.69% from 26.11%, according to the poll.

Strong prices on the LME are likely to offset the impact of weak volumes and support expansion of margins during the quarter. Aluminium and Zinc prices were up 7% on a sequential basis during the quarter and that will support these segments.

The volumes picture disclosed by Vedanta earlier, shows flat volumes for Zinc India, Aluminium and lower volumes for the oil business.

Vedanta's Aluminium business is likely to report strong results as an increase in captive alumina mix will offset higher power costs, resulting in cost of production to remain flat sequentially. The full benefits of higher captive Alumina would reflect from the second half for Vedanta.

The EBITDA for Vedanta's Oil & Gas business is likely to decline on lower volumes.

Here are some of the other things to watch out for during Vedanta's results:

• Progress on volume and margin expansion projects


• Management commentary on the demerger status is a key monitorable.


• Cashflow for the parent and debt repayment reschedule


• FY26 production, cost and capex guidance

Shares of Vedanta are down 1.8% at the start of the trading day at ₹507 ahead of the results announcement.