As the Q1 earnings season approaches, major Indian metal companies — Vedanta, Tata Steel, Hindalco, and Hindustan Zinc (HZL) — are preparing to announce their financial results. These companies have observed substantial share price appreciation over the past year, with gains reaching up to 68% for some.
Brokerage Nuvama's Q1FY27 Expectations for Metal Giants
Hindalco Industries
Hindalco Industries is anticipated to report an improvement in profitability for its Indian operations during the June quarter. This boost is primarily attributed to stronger aluminium realisations. Analysts project an approximate 14% quarter-on-quarter rise in the company's India business EBITDA, reaching around Rs 6,960 crore. The aluminium segment, including Utkal Alumina, is expected to be a key driver, with EBITDA estimated to increase by nearly 16% sequentially. This growth is supported by a 6.9% rise in blended aluminium realisations to $4,448 per tonne. Meanwhile, the copper business is expected to maintain a stable performance, and Novelis's adjusted EBITDA is projected to remain largely flat.
Hindustan Zinc
Hindustan Zinc is forecast to deliver a broadly stable operating performance in the June quarter, with EBITDA around Rs 7,650 crore. This stability comes despite mixed factors: higher average zinc and blended silver prices are expected to support earnings, particularly after an increase in import duty on silver. However, these positive impacts are likely to be counteracted by lower sales volumes across zinc, lead, and silver, which are projected to decline sequentially. Additionally, the cost of zinc production (excluding royalty) is estimated to increase by about 5% quarter-on-quarter.
Vedanta
Vedanta is expected to show a modest sequential improvement in its consolidated earnings, with EBITDA projected to rise by approximately 6% quarter-on-quarter. This growth is largely driven by robust zinc prices across its various operations. The international zinc business is set to be a significant contributor, with EBITDA potentially surging by about 145% due to improved realisations and reduced production costs. In contrast, the India zinc business is expected to report largely flat EBITDA, as higher metal prices are likely to be offset by reduced sales volumes. Furthermore, the copper business is anticipated to experience a sharp turnaround, with EBITDA significantly increasing from the previous quarter.
Tata Steel
Tata Steel's India business is predicted to achieve stronger profitability in the June quarter, even with anticipated lower seasonal volumes. Standalone adjusted EBITDA per tonne is projected to increase by around Rs 2,515 quarter-on-quarter, reaching Rs 17,760 per tonne, primarily aided by a substantial rise in blended steel realisations. However, these gains may be partially offset by an increase in coking coal costs. Domestic steel sales volumes are expected to decline seasonally by about 17%. The European business, particularly Tata Steel Europe, is likely to remain under pressure, forecasting an EBITDA loss, largely due to higher costs and weaker volumes in the Netherlands, though reduced losses in the UK could offer some support. Overall, consolidated adjusted EBITDA is expected to decline about 6% sequentially.