Vedanta - 2Vs, 1C Lend The Base Punch; ICICI Securities Re-Initiates Coverage With A 'Buy'

ICICI Securities Report

We resume coverage on Vedanta Ltd. with a Buy rating. We see Vedanta weaving its growth story around two ‘Vs’ and one ‘C’ viz. volume, value, and cost reduction–across segments, especially in its aluminium and Zinc-India divisions.

Key points:

1. Significant volume growth aspirations for all divisions.

2. Aluminium/Zinc-India – potentially key earnings growth drivers.

3. Oil and gas production is likely to bottom up by FY26E.

4. Growth vectors at Vedanta may help pare debt by $3 billion over the next three years.

5. Dividend yield could sustain at more than 5% per annum.

Put together, we envisage an Ebitda CAGR of 25% YoY through FY26E and RoE of 40–45% over the next two years.

A SoTP-based valuation arrives at a target price of Rs 600, implying an enterprise value/Ebitda of 5.7 times on FY26E and FY27E blended Ebitda (50% weight each).

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.