Brokerage firm Investec has initiated coverage on Vedanta Aluminium Metal Ltd. with a 'buy' recommendation and a price target of ₹630 per share. According to reports from CNBC TV18, the brokerage has valued the company at 7 times its estimated financial year 2028 Enterprise Value to EBITDA. Investec estimates the company's volumes and EBITDA to deliver 6% and 28% compound annual growth rate (CAGR) over financial year 2026-2028, with rapid deleveraging. The latest reports indicate that Investec projects an upside of over 35% based on their price target.
As reported by CNBC TV18, Vedanta Aluminium is positioned as the cleanest India aluminium proxy, controlling more than 55% and 40% of domestic smelting and refining capacity, respectively. The company plans to achieve net cash status by financial year 2028 from the current net debt-to-EBITDA level of 1.7 times. Investec estimates structural cost gains worth up to $140 per tonne, driven by captive coal/bauxite integration and improved alumina balance. The brokerage has factored in growth capex to arrive at these projections.
According to CNBC TV18, shares of the demerged Vedanta entity listed on the exchanges earlier this month, with the aluminium business being the key driver of value out of the four demerged entities. Post its listing, brokerages Citi and Kotak Institutional Equities initiated coverage with 'buy' recommendations and price targets of ₹560 and ₹600, respectively. Last week, brokerage firm CLSA initiated coverage with a price target of ₹540 per share. As reported by CNBC TV18, shares are currently trading 0.4% lower at ₹450.27, down 14.3% from its listing price of ₹522 per share. The latest reports indicate that shares are recovering from the day's lows, showing some resilience despite broader market pressures from a stronger dollar and falling aluminium prices affecting metal stocks.
