Can Vedanta Aluminium Deliver 39% Returns Backed by Strong Growth Projections?

Synopsis: A major brokerage remains optimistic about Vedanta Aluminium, expecting strong growth driven by lower costs, higher production, improved profitability, industry leadership, and reduced debt after the demerger.

The shares of this company are one of the leading aluminium producer and one of the largest players in India’s aluminium industry are in the spotlight after Investec, CLSA and other brokerages gave target up to 39% upside. 

With a market capitalisation of Rs. 1,80,562cr, the shares of Vedanta Aluminium Metal Ltd closed at Rs. 461.75 per share, up from its previous close of Rs. 452 per share.  The stock has went down 7% from its listing price.

Brokerage Commentary 

Investec has begun covering Vedanta Aluminium Metal Ltd with a clear “Buy” recommendation. They set a target price of Rs. 630 per share. This target suggests a possible upside of 39% from the current trading levels. 

Investec values the company at 7 times its estimated financial year 2028 Enterprise Value to EBITDA (EV/EBITDA). This reflects strong confidence from institutional investors in the long-term financial prospects of the newly demerged company. 

Key Triggers for Investec’s Optimism 

The brokerage strongly supports Vedanta Aluminium because it is the cleanest pure-play option in India’s aluminum sector. The company controls over 55% of the domestic smelting capacity and 40% of the refining capacity. 

Due to planned growth capital spending, the company’s volumes and EBITDA are expected to achieve a compound annual growth rate (CAGR) of 6% and 28%, respectively, over the financial years 2026–2028. 

Furthermore, the firm expects rapid deleveraging, forecasting a shift to a net cash status by FY28 from its current net debt-to-EBITDA ratio of 1.7 times. Structural cost gains of up to $140 per tonne are also expected, thanks to improved alumina balance and captive coal and bauxite integration.

Vedanta Aluminium was listed on the stock exchanges in June 2026 after separating from its parent company, Vedanta Ltd. It is seen as the main value driver among the newly formed entities.

Investec’s bullish call marks the fourth major Wall Street / domestic institutional “Buy” rating since the listing. It follows optimistic initiations from other prominent brokerages, including Kotak Institutional Equities with a target of Rs. 600, which is upside of 33%, Citi with a target of Rs. 560, which is upside of 24%, and CLSA with a target of Rs. 540, which is upside of 19%.

Vedanta Aluminium Metal Ltd is one of the leading aluminium producers and one of the largest players in India’s aluminium industry. Following its demerger, it operates as a focused pure-play aluminium business with significant control over domestic smelting and refining capacity. The company benefits from integrated operations, captive raw material sources, and strong scale advantages, positioning it for volume growth, cost efficiencies, and improved profitability in the coming years. 

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