Vedanta's 3D strategy will unlock 'major value', boost share price, Nuvama says

Brokerage firm Nuvama Institutional Equities has reiterated its 'Buy' rating on Vedanta with a price target of ₹686 per share. According to Nuvama, the company's strategy around demerger, delivery and deleveraging is on course to pay off, aided by favourable commodity prices.

Vedanta is in the process of splitting its businesses into five separately listed companies, which Nuvama says will give investors the option to pick individual commodity plays and help unlock value for units such as aluminium, steel and power.

The brokerage believes Vedanta's fair value of ₹686 could rise by another ₹84 once the demerger comes into effect.

The NCLT hearing on the second motion was completed on November 12, and Nuvama expects a final order in December, followed by the demerger's completion in the fourth quarter is this fiscal.

The brokerage has flagged two additional triggers:

- The removal of the overhang from Vedanta not acquiring JP Associates, and a likely ₹20 dividend per share by January 2026.

- It expects Vedanta to now focus on expanding its existing operations and further reducing debt.

Nuvama estimates a 16% CAGR in EBITDA between FY25 and FY28, driven by lower aluminium costs, higher aluminium and zinc volumes and firm commodity prices.

Consolidated net debt is expected to fall to ₹61,000 crore by the end of FY27.

Vedanta is currently valued at 5.3 times its estimated FY27 EV/EBITDA and 4.8 times its estimated FY28 EV/EBITDA.

Shares of Vedanta Ltd. are trading 1% lower near day's low at ₹504.65. The stock has risen 14% so far in 2025.