Vedanta shares experienced a pause in their recent rally on Thursday, declining 1.69% on the NSE to hit an intraday low of ₹664.35. This marked the end of a strong four-day winning streak that had delivered impressive gains of nearly 12% over the past trading sessions, with the stock settling at ₹675.70 in the previous session.

Market Performance and Trading Activity

The stock demonstrated significant volatility during Thursday's session, trading in a wide range between ₹664.30 and ₹678.60. Despite the decline, Vedanta remains positioned close to its 52-week high of ₹679.40, reflecting the strength of its recent performance.

Trading volumes remained elevated compared to recent averages, indicating continued investor interest despite the profit-taking activity that emerged after the stock's strong run-up.

Sector-Wide Weakness Impacts Performance

The decline in Vedanta shares coincided with broader weakness across the metal sector. The Nifty Metal index traded lower by 0.40%, creating headwinds for metal stocks across the board.

The synchronized decline across major metal stocks suggests sector-specific factors influenced trading sentiment during the session.

Recent Corporate Development

Adding to the company's news flow, Vedanta recently informed exchanges about receiving an ESG rating of 67, categorized as "Strong," from SEBI-registered ESG Rating Provider ESGRisk.ai. The company clarified that this rating was issued independently without any engagement from Vedanta for the evaluation process.

Technical Position

Despite Thursday's decline, Vedanta's stock remains well-positioned technically after its recent strong performance. The four-day rally of nearly 12% had brought the stock within striking distance of its 52-week high, though profit-taking has now emerged as investors book gains from the recent surge.

Vedanta Ltd. has received an upgraded price target from Kotak Institutional Equities, which raised its target to ₹780 from ₹650 while maintaining a 'buy' rating on the Anil Agarwal-owned mining conglomerate. The brokerage believes the company is optimally positioned to capitalize on the ongoing rally in base and precious metals.

Strong Metals Exposure Drives Optimism

Kotak's bullish stance is anchored in Vedanta's significant exposure to high-performing metals segments. The brokerage's analysis reveals that approximately 85% of the company's estimated financial year 2027 Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) will be derived from three key metals experiencing strong market conditions.

All three metals are currently trading at either record high levels or multi-year highs in global markets, providing a favorable backdrop for Vedanta's revenue generation.

Capacity Expansion and Demerger Benefits

The brokerage highlighted additional growth drivers beyond the metals rally. Vedanta's planned capacity increases across multiple business segments, including aluminium, zinc, and power, over financial years 2027 and 2028 are expected to provide further momentum for the stock price.

The company's proposed demerger exercise represents another significant catalyst. Kotak expects Vedanta to achieve all necessary clearances soon, with the demerger process anticipated to begin in the fourth quarter of the current financial year and conclude in phases by the first quarter of financial year 2027.

Revised Financial Projections

Based on these positive developments, Kotak has increased its EBITDA estimates for Vedanta:

The brokerage expects value unlocking from higher multiples in the aluminium and power divisions as a result of the demerger. At current spot prices, Kotak anticipates Vedanta's share price target could reach ₹965.

Market Performance and Analyst Sentiment

Vedanta shares demonstrated strong performance, closing 6% higher on Friday at a record high of ₹675. The stock has delivered impressive returns, gaining 55% over the past 12 months.

Analyst sentiment remains overwhelmingly positive, with none of the 14 analysts covering Vedanta maintaining a 'sell' rating. The analyst community is divided between 10 'buy' ratings and four 'hold' recommendations, reflecting broad confidence in the company's prospects.