Brokerages raise price targets of Vedanta citing multiple positives
economictimes.indiatimes.comVedanta, citing multiple positives such as operational efficiencies, cost reduction, improved EBITDA estimates and visibility on demerger along with capex plans driving the next phase of growth.
The average of revised price targets given by the six brokerages and research firms such as Nuvama, Phillip Capital, IIFL, CLSA, Motilal Oswal Financial Services and Investec, is Rs 536, indicating a 19% upside over Vedanta's closing price of Rs 450.
Of the six, Nuvama, in their report dated June 15th, placed the highest value on Vedanta’s stock at Rs 644 per share, marking an 18.8% increase. Meanwhile, Phillip Capital revised its target price from Rs 450 to Rs 552. IIFL, too, has upgraded the recommendation from ‘ADD’ to ‘BUY’, increasing the target price from Rs 416 to Rs 525 – a 26% increase.
Key factors cited for the uptick in the target price of the respective research firms were cost-reduction initiatives, a change in the mix (value addition), which will drive future earnings and a strong commitment to deleveraging the balance sheet. Moreover, Vedanta management disclosed that they had received approvals from almost 52% of its lenders and anticipated securing the remaining approvals within a few weeks.
Regarding the demerger, Nuvama projects its completion by the end of FY25, while MOSL is more optimistic, targeting the end of CY24. Phillip Capital analysts believe the demerger will offer the group greater flexibility in managing debt, which will be value-accretive in nature.
Another point is that the research
