New Delhi: Shares of Vedanta Limited surged to fresh all-time highs this week, riding a powerful rally in global metal prices and renewed optimism around the company’s proposed demerger. Leading brokerages say the stock still has significant upside, backed by strong earnings visibility and favourable commodity cycles.
Vedanta has emerged as a key beneficiary of the ongoing boom in base and precious metals. In the past quarter alone, aluminium and zinc prices have climbed 8–12 per cent, while silver has soared nearly 40 per cent. The sharp price rally has boosted margins across the non-ferrous metals space, placing Vedanta in a sweet spot.
Kotak Institutional Equities believes Vedanta is among the best-placed companies to capitalise on the current upcycle. The brokerage estimates that nearly 85 per cent of the company’s FY2027 EBITDA will be driven by aluminium (around 50 per cent), zinc (20 per cent) and silver (15 per cent).
Kotak expects the long-awaited demerger into five independent entities to begin in the fourth quarter of FY26 and conclude by the first quarter of FY27. The split is likely to unlock value, especially as the aluminium and power businesses could command higher market multiples post-demerger.
Reflecting the improving outlook, Kotak has raised its EBITDA forecasts by 8.7 per cent for FY27 and 6.9 per cent for FY28. It has pegged Vedanta’s fair value at ₹780, with a potential upside to ₹965 if current spot metal prices sustain.
Nuvama Institutional Equities has also reiterated its positive view on the stock, citing strong operating leverage and firm metal prices. The brokerage expects Vedanta’s consolidated EBITDA to jump nearly 28 per cent quarter-on-quarter, led by aluminium and zinc, although the oil and gas business may see some moderation.
Nuvama noted that average LME aluminium and zinc prices currently stand at USD 2,829 per tonne and USD 2,166 per tonne, respectively, while silver is trading at USD 55.2 per ounce. It also projects Hindustan Zinc Limited’s EBITDA to rise by 31.5 per cent sequentially, supported by higher production volumes and better realizations.
With metal prices at multi-year highs and the demerger timeline gaining clarity, analysts believe Vedanta’s rally may still have room to run.
