Broking Firms Bullish on Vedanta, Expect Demerged Entities’ Listing in June

Why It Matters

The demerger could unlock significant shareholder value and give investors clearer exposure to high‑growth commodity segments, reshaping India’s mining and metals landscape.

Key Takeaways

• Target price lifted to ₹1,000 (~$12), triple current price.
• Demerger of aluminium, steel, oil & gas slated for June listing.
• FY26 revenue hit ₹174,075 cr (~$21 bn), EBITDA ₹55,976 cr (~$6.7 bn).
• EBITDA projected 19‑42% CAGR FY26‑FY28 for demerged units.
• Cost cuts from captive coal and bauxite mines boost margins.

Pulse Analysis

Vedanta’s FY26 earnings beat expectations, driven by robust commodity pricing and disciplined cost management. Revenue surged 15% YoY to roughly $21 billion, while EBITDA climbed 29% to about $6.7 billion, underscoring the firm’s operational efficiency. The company’s strategic move to split into five pure‑play entities—covering aluminium, steel, iron‑ore, oil‑gas and power—aims to sharpen each unit’s financial profile, making them more attractive to investors seeking focused exposure to high‑margin segments.

Brokerages such as Investec, Nuvama and Kotak have revised their valuations, collectively raising target multiples and setting a sum‑of‑the‑parts price of ₹1,000 per share. The upgrades hinge on anticipated cost reductions from newly commissioned captive coal mines (28 mtpa total) and a bauxite mine, which should lower input expenses and improve margins through FY27‑28. Analysts also highlight the demerger’s potential to lift valuation premiums, as pure‑play miners typically trade at higher EV/EBITDA multiples than diversified conglomerates.

For the broader Indian mining sector, Vedanta’s restructuring signals a shift toward greater transparency and capital allocation efficiency. Investors may view the June listings as a catalyst for fresh capital inflows, while the clearer asset segmentation could spur competition among global commodity players. However, execution risk remains, particularly around integration of captive mines and the timing of post‑demerger dividend policies, factors that will shape market sentiment in the coming quarters.