The brokerage firm Nuvama has reaffirmed its ‘Buy’ on Vedanta, maintaining a target price of Rs 663 based on FY27E sum-of-the-parts valuation. According to brokerage firm, the growth prospects for Vedanta remain intact, defined by it positive performance across multiple segments.
3 reasons why the firm continues to rate the stock as a ‘Buy’ – 1. Strong earnings performance in Q3
The brokerage firm highlighted that “higher aluminium prices offset the greater alumina cost,” which helped the company improve the aluminium EBITDA per tonne in Q3.
Furthermore, the aluminium segment, which plays a crucial role in the overall profitability, saw increased earnings despite rising costs. Alongside gains in zinc, iron ore, and oil business, consolidated EBITDA rose 13% quarter-on-quarter to Rs 111 billion surpassing the brokerage estimate at Rs 104.7 billion.
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Looking forward, the brokerage firm is optimistic about the near-term results. The brokerage house expects “a 10%+ QoQ jump in Q4 EBITDA amid firm prices and lower CoP in aluminium and zinc.”
This anticipated improvement comes as the cost benefits begin to materialise, particularly in the aluminium segment where lower alumina prices are expected to show up predominantly in Q1FY26.
3. Value unlock through demerger
Another key reason for the brokerage continued buy rating is the potential demerger of Vedanta’s business. The firm notes that the demerger is “likely to be concluded by end-Q1FY26” once approvals are secured from lenders and equity shareholders (expected by 18th Feb-25).
According to the brokerage firm, this move is expected to unlock additional value by streamlining operations and enhancing focus on core segments positioning the company in the first decile of the global cost curve by FY28E.
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Vedanta in Q3 FY25 reported 76.2% rise in net profit, reaching Rs 3,547 crore, up from Rs 2,013 crore in Q3 FY24. The company also saw a 10% increase in revenue, totalling Rs 38,526 crore compared to Rs 34,968 crore last year. In addition to it, Vedanta achieved its highest-ever Q3 EBITDA of Rs 11,284 crore,
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