Vedanta shares have reached new highs following a significant target price revision from brokerage firm Nuvama on Wednesday, January 14. The mining conglomerate owned by Anil Agarwal has received the most bullish projection on the street, with analysts projecting substantial upside potential based on multiple growth catalysts.

Nuvama Raises Target Price to ₹806

Nuvama has maintained its "buy" rating on Vedanta while raising the price target by 18% to ₹806 from the previous ₹686. This revised target represents the highest among 14 analysts covering the stock and implies an upside potential of 27% from Tuesday's closing levels.

Demerger Progress Drives Optimism

The brokerage highlighted that Vedanta is in the final stages of receiving statutory clearances for its demerger into five different listed entities. This corporate restructuring is expected to lead to significant value unlocking for shareholders. The demerger process has been a key catalyst driving investor interest in the stock.

Nuvama's investment thesis is further supported by strong commodity prices, ongoing cost reduction initiatives, and anticipated volume growth across the company's operations. These factors collectively strengthen the case for continued outperformance.

Enhanced Financial Projections

The brokerage has revised its financial estimates upward to reflect improved market conditions:

These enhanced projections factor in higher commodity prices, which are expected to drive Vedanta's EBITDA growth at a Compounded Annual Growth Rate of 20% over the financial year 2025-2028 period.

Market Valuation and Analyst Sentiment

Nuvama noted that Vedanta's current market price has yet to fully factor in the value of its aluminium and zinc businesses, suggesting that other business segments are practically available at no additional cost. This valuation gap presents an attractive opportunity for investors.

The analyst community remains overwhelmingly positive on Vedanta's prospects:

• Buy ratings: 10 out of 14 analysts
• Hold ratings: 4 out of 14 analysts
• Sell ratings: 0 out of 14 analysts

Stock Performance

Vedanta shares are trading with gains of 3% on Wednesday at ₹656.50. The stock has demonstrated strong momentum, posting gains for five consecutive months and advancing nearly 10% in January alone. This sustained performance reflects growing investor confidence in the company's strategic initiatives and market positioning.

Vedanta shares reached a record high on Wednesday, gaining over 5% to trade at ₹669.85, marking the stock's biggest single-day gain since May last year. The rally extends a strong trend with gains in six out of the last seven trading sessions.

Commodity Price Rally Drives Performance

The primary catalyst behind Vedanta's surge has been a sharp rally in global commodity prices across its key business segments. Silver, zinc, aluminium, and copper have all experienced significant price increases, directly benefiting the diversified mining company's revenue prospects.

A combination of factors including a weaker dollar and global demand-supply mismatches have contributed to this broad-based commodity price rally, providing strong tailwinds for Vedanta's diversified mining operations.

Valuation and Financial Projections

Vedanta's current valuation metrics reflect the improved commodity outlook. The company's total enterprise value stands at ₹3.30 lakh crore, which includes debt of nearly ₹62,000 crore. Based on consensus estimates projecting EBITDA of around ₹60,000 crore for FY27, the stock trades at 5.40 times its estimated FY27 Enterprise Value/EBITDA.

Nuvama's Bullish Outlook

Brokerage firm Nuvama has set the street's highest target price for Vedanta at ₹806, revised upward from ₹686. The brokerage projects Vedanta's EBITDA to reach ₹74,000 crore in FY27, raising estimates for the next two years by 17% and 8% respectively to factor in higher commodity prices and operational improvements.

Nuvama assumes EBITDA will grow at a 20% CAGR from FY25 to FY28, driven by cost reduction in aluminium operations, volume growth in international zinc, and power segment improvements.

Business Segment Breakdown

Vedanta's EBITDA profile is dominated by aluminium operations, followed by zinc (with Hindustan Zinc contributing 90%), and smaller contributions from oil & gas and power segments. The currently shut copper business is expected to contribute mildly negative EBITDA.

Demerger Value Unlocking

The ongoing demerger process continues to support valuations, with Chairman Anil Agarwal previously indicating completion by March-April 2026. Post-demerger, Vedanta will operate as five separately listed entities, with the aluminium business commanding the highest valuation in Nuvama's sum-of-the-parts analysis.

Nuvama notes that Vedanta's current market price does not fully factor in the aluminium and zinc businesses, suggesting other operations are available "virtually free" at current valuations.