Vedanta Resources: Still improving credit, but wait for new bond

Elevated prices across key commodities, including zinc, aluminium, copper and oil, are supportive of Vedanta Resources (VEDLN) key operating subsidiaries near-term earnings outlook - including those of Vedanta Ltd (VEDL), Hindustan Zinc Ltd (HZL) and Vedanta Aluminium (VAML) - given the group strong leverage to global commodity markets. We forecast EBITDA at the VEDLN group level to total USD7.5-7.7bn in FY27, representing a 25-28% increase from the USD6bn group-level EBITDA generated in FY26. But at the group current run-rate, our estimates may be under-stated, with the possibility of stronger upside, to c.USD8.2bn, in FY27. These, together with the group ongoing deleveraging efforts, should support further improvement in the holdco overall credit profile and further positive rating actions over the next six to nine months - including a one-notch rating upgrade by Moody and positive outlook revisions by S&P and Fitch. Add coverage of 7% 32s, 7.375% 34s and 7.75% 37s at Market Weight.