Brokerages remain divided on Vedanta Ltd. even after the company reported a strong December-quarter performance, with bulls pointing to metals price tailwinds and the upcoming demerger, while others flag limited upside at current valuations.
Citi maintained its 'buy' rating on the stock and raised its target price sharply to Rs 900 from Rs 585, citing Q3 results that came slightly ahead of expectations. The brokerage said the sequential rise in Ebitda was largely driven by better commodity prices, improved volumes and favourable forex, and reiterated that the demerger and listing are expected by Q1.
Emkay Research also stayed constructive, raising its target price by about 21% to Rs 850 from Rs 700 earlier. The brokerage said Vedanta's Q3 Ebitda of Rs 15,170 crore beat estimates and consensus, driven by a sharp improvement in aluminium and zinc profitability, which together contributed 86% of consolidated Ebitda. Emkay reiterated that the demerger remains on track with 1 April 2026 as the effective date and listings expected in May 2026.
Motilal Oswal, however, maintained a 'neutral' stance with a target price of Rs 810, implying a 6% upside from the current market price of Rs 766. While the brokerage acknowledged in-line earnings supported by favourable prices and better volumes, it flagged valuation comfort, noting that the stock trades at 7x FY27 EV/Ebitda and 4.4x P/BV.
Analysts highlighted Vedanta's strong operational performance in the quarter under review, also taking comfort from management's reiteration on deleveraging. While strong metals prices, improving balance-sheet metrics and the upcoming demerger have led brokerages like Citi and Emkay to turn more bullish, others such as Motilal Oswal remain cautious, citing limited near-term upside from current levels.
Vedanta Q3 Results (Consolidated, QoQ)
- Revenue up 17% at Rs 45,899 crore vs Rs 39,218 crore (Estimate: Rs 43,802 crore)
- EBITDA up 31% at Rs 15,171 crore vs Rs 11,612 crore (Estimate: Rs 14,309 crore)
- Margin 41% vs 34% (Estimate: 33.27%)
- Net Profit up 124% at Rs 7,807 crore vs Rs 3,479 crore (Estimate: Rs 5,582 crore)
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