Vedanta shares slide 10% amid global selloff, fears of growth in metals sector

Vedanta shares slid 9.8% in intraday trade to their day’s low of Rs 362.20 on the BSE amid a global selloff amid growth concerns in these uncertain and volatile times as the US president, earlier in the last week, imposed reciprocal tariffs on various countries.

The continued imposition of a 25% U.S. tariff on steel and aluminium is likely to drive up domestic prices in the American market, undermining global competitiveness.

As exporters from countries such as Vietnam, South Korea, and Japan shift their focus to alternative markets like India and the Middle East, Indian manufacturers are now contending with a wave of low-cost imports. This influx is intensifying pressure on local producers, who are already struggling with shrinking margins and fluctuating production levels.

A previous note by Jefferies also highlighted that while the U.S. accounts for just 4% of India’s steel exports, it remains a key sentiment driver—especially for companies like Hindalco. This is due to its subsidiary, Novelis, which contributes around 13–15% of Hindalco’s consolidated EBITDA through its U.S.-focused operations.

Also read: History Repeats? US tariffs have always preceded recessions, warns Nilesh Shah

Vedanta Q3 results

Vedanta Ltd had reported a 76% year-on-year (YoY) in its consolidated net profit for the quarter ended December 31, 2024, to Rs 3547 crore. The profit is attributable to the owners of the company.Meanwhile, the revenue from operations increased 10% YoY to Rs 38,526 crore.

Q4 preview

Domestic brokerage Nuvama projects a modest 2% year-on-year growth in Nifty 50 earnings for Q4FY25, with the full-year FY25 EPS growth estimate reduced to 6%, down from the earlier forecast of 8%. The downgrade reflects continued earnings softness, sluggish revenue growth, and escalating global uncertainties—particularly concerns surrounding the impact of U.S. tariffs.

With this, Nuvama stated the sectors on which it is underweight. The sectors included in the list are Industrials, metals, IT, power, PSU banks.

For Vedanta, Nuvama said that the company is expected to post a 2% sequential drop in EBITDA for Q4FY25, primarily due to a mixed trend in metal prices. While aluminium prices rose marginally by 0.8% quarter-on-quarter, zinc prices fell 7%, impacting overall realizations.

The report estimates Q4FY25 revenues at Rs 3,78,196 million, down 3% QoQ but up 7% YoY. EBITDA is forecast at Rs 1,08,346 million, showing a 2% decline QoQ, and core PAT is projected at Rs 35,381 million, largely flat from the previous quarter.

Higher alumina costs are expected to raise aluminium cost of production (CoP) by 5%, while zinc CoP may decline another 2%. Segment-wise, Nuvama anticipates EBITDA to fall by 2.6% for aluminium, 2.1% for power, and 4.2% for oil & gas, while Zinc India and Zinc International may post modest increases of 0.2% and 1.8%, respectively.

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