Leading broking firms have raised the target price for Vedanta’s shares to ₹1,000 apiece, over three times its current price, based on its March quarter performance and proposed demerger. Vedanta shares ended at ₹305.40 on the NSE on Thursday.
Brokerages have turned increasingly constructive on the company, citing improving fundamentals, stronger free cash flow generation, cost reductions, and significant value unlocking potential.
Demerger gains
Nuvama said it expects aluminium, steel and iron ore, oil and gas and power entities likely to be listed in June. It expects some of the demerged entities to benefit from firm commodity prices and volume growth and record a 19-42 per cent EBITDA compounded annual growth rate between FY26 and FY28.
Vedanta delivered record FY26 performance, with annual revenue rising 15 per cent y-o-y to ₹1,74,075 crore and EBITDA increasing 29 per cent y-o-y to ₹55,976 crore, supported by strong operational execution, margin expansion and continued deleveraging.
The UK-based Investec has assigned a fair value per share (SOTP-based target price) of ₹1,000 to the pre-demerger entity, citing a Q4 earnings beat and strength in the company’s aluminium business.
“With value crystallisation increasingly visible and no deterioration in underlying operations, we reiterate our buy stance on Vedanta and recommend staying invested through the demerger process,” said Investec.
It valued the conglomerate’s aluminium business at ₹606 per share, while assigning a fair value of ₹319 per share to the flagship Vedanta (including base metals).
Valuation upgrade
“While formalised post de-merger payout policies are still awaited, incremental disclosures provide greater clarity, prompting us to revisit capex and leverage assumptions across the five resulting entities. We raise our target multiple for the aluminium business and upgrade our sum of the parts-based target price to ₹1,000 a share,” it said.
Kotak Institutional Equities maintained a target price of ₹940 on Vedanta, noting that the company’s aluminum business is well-positioned for volume growth and cost reductions from backward integration over FY27-28E.
The commissioning of captive coal mines (Kurloi: 8 mtpa, Ghogharapalli: 20 mtpa) and Sijimali bauxite mine (12 mtpa) should drive costs lower over FY27-28E, it said.
CLSA, which has a 12-month price target of ₹835 on the company, highlighted Vedanta’s improving cost trajectory, capacity expansion and ongoing deleveraging as key re-rating drivers. The brokerage flagged that the restructuring could sharpen investor visibility into each vertical’s financial profile, particularly as inter-company transactions and capital structures become more transparent.
Emkay Global Financial Services said that the restructuring may drive upside through potential valuation re-rating, given that pure-play entities typically command a premium over diversified miners, and improved capital allocation led by more focused management teams.