Vedanta's Q1 Performance Moderated Due To Commodity Prices, Says Systematix Maintaining 'Buy'

Vedanta Ltd. remains committed to growth and has spent $5.6 billion out of the approved capex of $9.4 billion across its major operating segments. These projects not only focus on value addition and volume-led growth but also on backward integration and raw material securitization to ensure margin sustenance.

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Systematix Report

We revise our FY26E/FY27E Ebitda estimate lower by 4%/3% based on a mix of operational guidance for FY26 and revision in commodity price assumptions. Vedanta Ltd. remains committed to growth and has spent $5.6 billion out of the approved capex of $9.4 billion across its major operating segments.

These projects not only focus on value addition and volume-led growth but also on backward integration and raw material securitization to ensure margin sustenance.

Vedanta has delivered 15%/11%/11% revenue/Ebitda/PAT CAGR over FY21-FY25, and ongoing capex and various deleveraging strategies are likely to translate these CAGRs to 6%/14%/25% over FY25-FY27.

We value Vedanta FY27 EV/Ebitda SoTP with a revised target price of Rs 510/share (Rs 508/share earlier), implying an upside of 20% from current market price.

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