Here's Why Brokerages Are Changing Their Tune On Vedanta, See Upto 50% Upside

The debt-ridden Vedanta Group has received upbeat commentary and an upward revision from analysts as the Anil Agarwal-owned firm tries to keep its ballooning debt under check and improve its earnings.

What Happened: Global brokerage firm CLSA has upgraded Vedanta shares from “sell” to “underperform” and raised the target price to ₹260 from ₹230. This decision comes as Vedanta guided an EBITDA target of $6 billion-$7.5 billion by FY25-27 through capacity expansion.

CLSA highlighted that the company’s capital allocation and corporate structure, along with operational parameters, will be crucial for re-rating. The brokerage firm emphasised the importance of monitoring the execution of growth and margin expansion projects.

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Analysts at Motilal Oswal said the company was “well positioned to capture domestic growth story with
strong product portfolio”. The brokerage maintained a “neutral” rating on the stock and raised its target price to ₹270.

“Despite the near-term headwinds, the long-term demand prospects look positive,” Motilal Oswal said in the note.

Nuvama reiterated its “buy” rating on the stock and upwardly revised its target price of ₹394 from ₹371 earlier, supported by tailwinds from its demerger into six entities.

However, Kotak Securities still has a “sell” rating on the stock with a target price of ₹255. The brokerage was upbeat on Vedanta’s capacity expansion plans and growth opportunities across divisions. However, it expects lower dividends from the stock until FY26.

Price Action: Over the past three months, the mining company’s stock has surged by 13%, outperforming the benchmark Sensex, which rose by 10%.

Vedanta’s share price was up 0.19% at ₹264.40 around noon on Wednesday.

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Posted In: Analyst ColorEquitiesLarge CapNewsUpgradesPrice TargetMarketsAnalyst RatingsVedanta