10 April 2024 – Vedanta shares experienced a robust rally in early trading on Wednesday, propelled by a notable upgrade from foreign brokerage firm CLSA. The upgrade, accompanied by a revised price target, has sparked optimism among investors regarding the company’s prospects.
CLSA has upgraded Vedanta shares from ‘Underperform’ to ‘Buy’ and revised its price target to Rs 390 from Rs 260 previously. This new target indicates a potential upside of 15% compared to Vedanta’s closing price of Rs 338.20 on Tuesday. According to CNBC TV18, CLSA highlighted Vedanta’s diversified exposure and its efforts to enhance capacity and profitability across segments as factors contributing to the upgrade.
Vedanta has outlined ambitious targets for group EBITDA, projecting a rise to $6 billion by FY26 and $7.5 billion by FY27 from the current $5 billion. However, CLSA underscored the importance of monitoring Vedanta’s leverage trajectory and corporate structure in light of increased leverage despite significant debt reduction at the parent company, Vedanta Resources.
In its March quarter preview, PhillipCapital suggested a potential decline in volumes across Vedanta’s Aluminium, Copper, and Zinc International segments, with iron ore volumes remaining flat quarter-on-quarter. The brokerage firm anticipates a 19.1% year-on-year decrease in profit and a 9.3% drop in sales for Vedanta.
