Vedanta shares back above ₹500 mark after analysts see further upside on Q2 results

Shares of Vedanta gained over 2% on Monday, November 3, after brokerage firms CLSA and Citi projected that the stock has the potential to go up to ₹600 levels going forward.

While CLSA has an "outperform" rating with a price target of ₹580 on the stock, while Citi has a "buy" rating with a price target of ₹585. The price targets imply a potential upside of 18% from current levels.

CLSA wrote in its note that the ramp-up of expansion projects and backward integration, largely of aluminium, power and zinc businesses, are likely to be the key drivers for Vedanta going forward.

The brokerage wrote in its note that while debt at the parent company Vedanta Resources is now well funded, the demerger is projected to be completed by the end of financial year 2026.

Outcome of the $2 billion bid that the company has put up for Jaiprakash Associates, will also be keenly watched by the street, as it is a diversified asset.

Citi wrote in its note that parent leverage at comfortable levels, potential medium-term aluminium LME upside, volume growth and likely lower costs, along with the completion of the demerger process by the end of financial year 2026 are some of the key triggers for Vedanta going ahead.

At this point, there are various uncertainties with regards to the company's bid for Jai Prakash Associates, but in case the NCLT approves their resolution plan, they may pay ₹3,700 crore upfront, and the rest ₹12,400 crore over a five-year period.

In an interaction with CNBC-TV18, the management of Vedanta said that it sees huge value in the power assets of Jaiprakash Associates, adding that the disinvestment of the steel business will happen at the right price.

The brokerage believes that Vedanta will monetise some of the assets in case they win the bid.

15 analysts have coverage on Vedanta, of which, 10 have a "buy" rating on the stock, four say "hold", while one has a "sell" recommendation.

Shares of Vedanta are trading 2.4% higher on Monday at ₹505.2. The stock has risen 7% in the last one month.