Investec has initiated coverage on Vedanta Aluminium, with a “buy” recommendation, and a price target of ₹630 per share. Based on the price target, Investec has valued Vedanta Aluminium at 7 times its estimated financial year 2028 Enterprise Value to EBITDA.
Why Does Investec Like Vedanta Aluminium?
Vedanta Aluminium Metal is the cleanest India aluminium proxy, controlling more than 55% and 40% of domestic smelting and refining capacity, respectively, Investec said.
The brokerage, factoring the growth capex, has estimated 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 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.
Shares of the demerged Vedanta entity listed on the exchanges earlier this month. The aluminium business is said to be the key driver of value out of the four demerged entities.
Post its listing, brokerages Citi and Kotak Institutional Equities initiated coverage on the stock with “buy” recommendations with price targets of ₹560 and ₹600, respectively.
Last week, brokerage firm CLSA initiated coverage on the stock with a price target of ₹540 per share.
Shares of Vedanta Aluminium are recovering from the lows of the day, currently trading 0.4% lower at ₹450.27. It is down 14.3% from its listing price of 522 per share.
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