Kotak Institutional Equities has maintained its 'buy' rating on Vedanta Aluminium with a price target of ₹540, implying a potential 31% upside from current levels. According to reports from CNBC TV18, the brokerage believes the market is underestimating the durability of the aluminium upcycle and the company's earnings growth potential. The recommendation comes as the stock has traded well below its debut levels since its market debut.
Vedanta Aluminium shares began trading on June 15 this year, debuting at ₹522 on NSE and ₹527 on BSE. As reported by CNBC TV18, the stock currently trades at ₹411.9, down 8% over the last month but showing a 1.9% gain on Friday. The stock has the highest analyst coverage among the demerged entities, with 10 out of 11 analysts maintaining 'buy' ratings and only one 'sell' recommendation. The consensus price targets imply an upside potential of 31% from current levels.
According to Kotak's analysis reported by CNBC TV18, ongoing concerns around a large supply wave from Indonesia remain overdone, with project execution challenges likely to limit capacity additions and keep global markets tight throughout calendar year 2028. The brokerage expects Vedanta Aluminium to be well positioned to deliver sector-leading volume growth, ensure cost reduction from backward integration, and achieve a strong free cash flow yield of 12% and 13% in financial years 2027 and 2028 respectively. The company was part of the Vedanta demerger along with Iron & Steel, Oil & Gas, and Power entities.
As reported by CNBC TV18, Kotak's scenario analysis indicates that the risk-reward for Vedanta Aluminium remains attractive, even in a bear case commodity assumption. The brokerage maintains its positive outlook despite current market volatility, citing the company's strategic positioning in the aluminium sector and its operational capabilities to capitalize on the ongoing market dynamics.
