Vedanta Target ₹806: Nuvama Sees 27% Upside in Mining Giant
Overview
Nuvama Research has issued Vedanta Ltd. its highest-ever price target of ₹806, a 27% increase from current levels. The brokerage maintains a "buy" rating, citing strong commodity prices, cost efficiencies, and impending value unlocking from Vedanta's demerger into five separate entities. Nuvama also raised EBITDA estimates for FY27 and FY28, projecting a 20% CAGR for EBITDA from FY25-28.
Stocks Mentioned
Nuvama Research assigned Vedanta Ltd. its highest-ever price target of ₹806 per share on Wednesday, January 14. This represents an 18% increase from its previous target and implies a substantial 27% upside potential from Tuesday's closing price.
The brokerage reiterated its "buy" recommendation, underpinning its optimism on several key growth drivers. Central to Nuvama's thesis is Vedanta's ongoing demerger into five distinct listed entities, which is in the final stages of securing statutory clearances. This structural change is expected to unlock significant shareholder value.
Strong commodity prices, coupled with effective cost reduction initiatives and anticipated volume growth, further bolster Nuvama's investment outlook. The firm has consequently revised its Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) estimates upwards, increasing them by 17% for the financial year 2027 and by 8% for FY28. These adjustments reflect the sustained higher commodity price environment.
Nuvama projects that these favorable commodity prices will propel Vedanta's EBITDA to grow at a Compounded Annual Growth Rate (CAGR) of 20% between FY2025 and FY2028. The brokerage noted that the market has yet to fully price in the intrinsic value of the company's aluminium and zinc businesses, suggesting other segments are currently available at negligible valuation.
Market sentiment towards Vedanta remains overwhelmingly positive. None of the 14 analysts tracking the stock have a "sell" rating. Instead, 10 recommend "buy" while the remaining four advise "hold."
Shares of Vedanta concluded Tuesday's trading session 1.5% higher at ₹637. The stock has demonstrated robust performance, achieving gains for five consecutive months and posting an approximate 6% increase in the current month.
