Zinc India to remain at the driver seat for Vedanta, says ICICI Securities but cuts target price to Rs 345

Domestic brokerage firm ICICI Securities has cut the target price for Vedanta from Rs 369 to Rs 345, as it stated that its Zinc India business would remain a key growth driver for the Anil Agarwal-led conglomerate, maintaining a positive stance on zinc and silver prices. Vedanta derives 95% of its EBITDA from Zinc India, followed by Zinc International.

Vedanta had demerged into five listed entities, effective since May, which consist of Zinc India, Zinc International, Copper and Facor as major businesses.

According to the brokerage, higher commodity prices have lifted EBITDA for the company and its demerged entities. Vedanta reported a 99% year-on-year rise to Rs 8,500 crore in its EBITDA, driven by increased realisation amidst the rising base metal prices and lower cost of production.


ICICI Securities stated in its note that it expects zinc’s demand-supply dynamics to be in balance, while silver prices are expected to remain higher for longer in the Rs 2 Lakh range, which will likely keep the EBITDA for Zinc India high.

However, Vedanta largely relies on dividends from Zinc India to meet debt obligations at the standalone level, according to the brokerage. The company’s net debt stands at Rs 8,200 crore, including Rs 5,600 crore cash held by Zinc India, down from Rs 10,500 crore in the previous quarter.

Zinc India also accounts for Rs 5,000 crore of Vedanta’s growth capex allocation, with total Rs 7,000 crore FY27 growth capex earmarked for the consolidated business (Zinc India, Zinc International, Copper, and Ferrochrome).

While the brokerage maintains its bullish call on Zinc India and Zinc International, other businesses like Copper and Ferrochrome may take longer than expected to ramp up.

Zinc India reported EBITDA of Rs 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 Rs 250 crore, up 127% quarter-on-quarter, but down 41% year-on-year. Copper EBITDA stood at Rs 11 crore, up 38% quarter-on-quarter, driven by improved copper realisation and higher wire rod sales. Ferro chrome reported EBITDA of Rs 101 crore, up 15% QoQ.

The brokerage believes that the next big catalyst for Vedanta could be the initiation of the Saudi copper project. However, war-led delays could hinder the project from taking off, which is slated to begin from August 2026. Zinc India will be the main source of funding through dividends, and therefore, the growth project may tend to fluctuate as per Zinc India's dividend policy.