Vedanta Aluminium has received coverage initiations from two brokerages, Citi and Kotak Institutional Equities, both of which have assigned Buy ratings, citing favourable aluminium market conditions, planned capacity expansion and ongoing cost-efficiency measures. Demand from electric vehicles, renewable energy projects, data centres and copper substitution is expected to support aluminium prices, while supply growth remains limited.
Citi initiated coverage on Vedanta Aluminium with a Buy rating and a target price of Rs 560. The brokerage cited a constructive aluminium price outlook, growth potential from capacity expansion, efforts to reduce costs and improving balance-sheet metrics as key factors underpinning its view.
According to Citi, the company could move into a net cash position by FY28 as earnings improve and leverage declines. The brokerage has also placed the stock on a 90-day positive catalyst watch.
Citi's commodities team expects the global aluminium market to remain in deficit, which could support higher aluminium prices. In its base-case scenario, the brokerage sees London Metal Exchange (LME) aluminium prices moving towards $4,000 per tonne, implying a potential increase of 15–20% from current levels. Citi estimates that every $100 per tonne change in aluminium prices impacts Vedanta Aluminium's EBITDA by 4–5.5%.
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Kotak Institutional Equities initiated coverage with a Buy rating and a fair value target of Rs 600. The brokerage said Vedanta Aluminium is well positioned within the domestic aluminium sector, supported by its scale and expansion plans.
Kotak expects the company to have a longer growth runway than its domestic peers, driven by capacity additions and greater backward integration. The brokerage estimates that upcoming bauxite and coal assets could reduce reliance on external sourcing and improve the company's position on the global aluminium cost curve.
The brokerage forecasts EBITDA and profit after tax CAGR of 23% and 33%, respectively, over FY26–FY29. Kotak believes this could support further deleveraging and help fund the company's next phase of expansion.
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