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.

Vedanta shares surged to a new 52-week high on January 12, gaining significant momentum as investor sentiment strengthened ahead of the company's planned 1:5 demerger. The stock jumped 2.81% during the trading session, reaching ₹627 and demonstrating strong market confidence in the company's restructuring initiatives.

Strong Stock Performance Continues

The mining and metals conglomerate has delivered impressive returns across multiple timeframes, reflecting sustained investor interest in the company's strategic transformation.

NCLT Approves Major Restructuring Scheme

The rally gained additional momentum following the National Company Law Tribunal (NCLT) Mumbai Bench's approval of a comprehensive Scheme of Arrangement on January 9. The tribunal sanctioned the restructuring plan involving several key subsidiaries under Sections 230 to 232 of the Companies Act, 2013.

The approved scheme encompasses multiple subsidiaries including:

• Talwandi Sabo Power Limited (TSPL)
• Vedanta Aluminium Metal Limited
• Malco Energy Limited
• Vedanta Base Metals Limited
• Vedanta Iron and Steel Limited

Strategic Business Separation Initiative

According to the company's official communication, the reorganisation aims to separate Vedanta's diversified operations into focused business verticals. This strategic move will create distinct entities specializing in aluminium, power, iron and steel, and base metals operations.

Under the approved arrangement, Talwandi Sabo Power Limited, a wholly owned subsidiary, will assume control of Vedanta's Merchant Power Undertaking. The company filed the necessary exchange documentation on January 10, referencing earlier communications from September 16, 2025, and October 18, 2025.

Analyst Outlook and Valuation

Citi maintains a 'Buy' rating on Vedanta with a target price of ₹585. The brokerage firm notes that Vedanta's businesses currently trade at approximately 5x EV/EBITDA on a spot basis, indicating a conglomerate discount that could potentially reduce following the demerger as individual businesses begin independent trading.

The planned demerger represents a significant milestone in Vedanta's corporate strategy, with the company targeting completion by March 2026. This timeline provides investors with a clear roadmap for the anticipated structural changes and potential value unlocking across the separated business verticals.