Vedanta Bags Reinitiation From ICICI Securities, Brokerage Sees 18% Upside—Here's Why

Vedanta Ltd. received a reinitiation from ICICI Securities with an expected upside of 18%, citing volume growth, and cost reduction in its aluminium and zinc divisions.

The Anil-Agarwal-led company has charted growth plans across its key divisions until the financial year 2030, the brokerage said in a note on October 6. "Management has firm plans in place to achieve volume ramp-up in Zinc and oil and gas division."

ICICI Securities reinitiated coverage on the mining company with a 'buy' rating and a target price of Rs 600 per share, implying an upside of 18% from the previous close.

"Al and Zn-India are likely to be the bulwark of earnings growth." These divisions, together, are likely to account for 85% of incremental Ebitda through fiscal year 2026, it said.

ICICI Securities expects the debt of the parent company—Vedanta Resources—to shrink by another $2.5 billion.

"Vedanta is a fitting case of all the cylinders firing together," the brokerage said. "While Al and Zn India divisions are likely to grow on cost and volume leadership, respectively, we expect performance improvement for both O&G and Zn-international divisions as well."

The upcoming demerger into six independent listed companies is likely to pave a separate, sharpened growth path for individual divisions, ICICI Securities said. It will offer investors an opportunity to invest in growth-oriented pure-play companies, it said.

Vedanta's share price was trading 1.34% lower at Rs 501.9 apiece, compared to a 0.48% advance in the benchmark Nifty 50 as of 11:57 a.m.

It has risen 129% during the last 12 months, and has advanced by 163% on a year-to-date basis. The total traded volume so far in the day stood at 1.8 times its 30-day average. The relative strength index was at 63.

Five out of the eight analysts tracking the company have a 'buy' rating on the stock, one suggests a 'hold' and two have a 'sell', according to Bloomberg data. The average of 12-month analyst price targets implies a potential downside of 9.5%.