Whalesbook
May 7, 2026
Analysts have significantly boosted their outlook for Vedanta Limited, with multiple broking firms setting target prices around ₹1,000 per share. This optimism follows the company's strong March quarter performance and its strategic plan to demerge its various business units, a move expected to unlock substantial shareholder value.
Demerger Details and Timeline
Nuvama anticipates the listing of Vedanta's aluminium, steel and iron ore, oil and gas, and power entities as early as June. The brokerage forecasts that some of these demerged businesses will capitalize on firm commodity prices and volume growth, projecting an EBITDA compound annual growth rate of 19-42% between fiscal years 2026 and 2028.
Strong Financial Performance
Vedanta reported strong financial performance in fiscal year 2026, with annual revenue increasing 15% year-on-year to ₹1,74,075 crore. EBITDA also saw a significant jump of 29% year-on-year to ₹55,976 crore. These results were supported by strong operational execution, margin expansion, and continued deleveraging across the group.
Investec's Valuation Approach
Investec assigned a sum-of-the-parts (SOTP) based target price of ₹1,000 to the pre-demerger entity. This valuation follows a Q4 earnings beat and highlights strength in Vedanta's core aluminium business. Investec reiterated its buy stance, advising investors to remain invested through the demerger process. The firm valued the aluminium business at ₹606 per share and the flagship Vedanta (including base metals) at ₹319 per share.
Aluminium Business Poised for Growth
Kotak Institutional Equities maintained its ₹940 target price, emphasizing Vedanta's aluminum segment's positioning for volume expansion and cost efficiencies through backward integration. The anticipated commissioning of captive coal mines (Kurloi: 8 mtpa, Ghogharapalli: 20 mtpa) and the Sijimali bauxite mine (12 mtpa) are expected to further reduce costs through fiscal years 2027-2028.
Deleveraging and Transparency
CLSA set a 12-month price target of ₹835, identifying Vedanta's improving cost trajectory, capacity expansion, and ongoing deleveraging as key drivers for a potential stock price increase. The brokerage also noted that the restructuring will offer investors clearer views of each business segment's finances, especially regarding internal dealings and capital setup. Emkay Global Financial Services suggested that separating into standalone businesses could lead to higher valuations compared to diversified miners and foster improved capital allocation under more focused management teams.