1 week ago
MOFSL Sees 21% Upside in Vedanta Aluminium Stock
MOFSL believes Vedanta Aluminium Metal’s shares could rise by about 21%.
It gave the stock a Buy rating and a target price of Rs 540.
The company is increasing its aluminum-making capacity at BALCO and Jharsuguda.
This could help production grow through FY28.
Vedanta Aluminium is also trying to control costs by owning more mines and processing facilities.
Its Lanjigarh refinery has become larger, so the company may need to buy less alumina from outside.
Captive coal and power can also make aluminum production cheaper.
MOFSL says these changes could make the company more competitive globally.
MOFSL maintained a Buy rating on Vedanta Aluminium Metal with a Rs 540 target price, implying 21% upside.
The brokerage identified volume growth, integration-led cost reductions and a higher value-added product mix as key growth drivers.
BALCO commissioning and Jharsuguda debottlenecking could lift total smelting capacity to 3 MTPA by FY28-end.
The Lanjigarh refinery expansion to 5 MTPA is expected to improve internal alumina availability and reduce external procurement.
MOFSL expects captive coal, renewable power, operating efficiencies and scale to reduce costs and improve VAML’s global cost-curve position.
- Who
- MOFSL and Vedanta Aluminium Metal (VAML).
- What
- MOFSL maintained a Buy rating and set a Rs 540 target price for VAML, citing expected capacity growth, integration and cost reductions.
- Where
- Vedanta Aluminium’s operations at Jharsuguda, BALCO and Lanjigarh, with upstream assets including the Sijimali bauxite mine.
- When
- The estimates and targets refer primarily to FY28 and FY28-29; the Sijimali mine is expected to begin operations in 2HFY27.
- Why
- MOFSL expects stronger aluminum demand, tighter global supply, Indian import-substitution opportunities, greater vertical integration and lower production costs to support the stock.
Key facts
- Brokerage
- MOFSL
- Rating
- Buy
- Target price
- Rs 540
- Implied upside
- 21%
- Current smelting capacity
- 2.9 MTPA across Jharsuguda and BALCO
- Expected smelting capacity
- 3 MTPA by FY28-end
- Captive power capacity
- 4.5 GW, plus 1.3 GW of renewable energy secured through long-term agreements
- Expected hot-metal cost
- $1,550-$1,600 per tonne
Quotes
MOFSL
Brokerage that issued the Buy rating and price target
“VAML operates 4.5GW of captive power capacity and has additionally secured 1.3GW of renewable energy through long-term agreements, strengthening its energy-cost advantage. Management is targeting a further 9-12 per cent reduction in costs, with hot-metal cost of production expected to reach $1,550-1,600/t”
businesstoday.in
“This, coupled with India's robust demand growth and significant import substitution opportunities, creates a favorable outlook for VAML. Further, the valuation gap between VAML and its peers provides an opportunity for a structural re-rating of valuation multiples”
businesstoday.in
Sources
Related news
Milky Mist Debuts 18% Higher; Vedanta Aluminium Gets 'Sell'
SMIFS Sees Upside in India’s Leading Solar Stocks
Reliance Explores Aluminium as Ambani-Adani Rivalry Expands
Vedanta Aluminium to raise ₹13,500 crore bank loan after split
Reliance Explores Aluminium Production Through Odisha Bauxite and Coal Gasification
Midday market movers: Vedanta Aluminium, Hitachi Energy rise, Ola slumps
Jharsuguda Students Shine Through Rapid District Hockey Development
Odisha Government Scrutinizes Vedanta’s Jharsuguda Water Use
Vedanta Trains 30 Jharsuguda Youths in Food Services
Government-Backed Coal Mine Sets Production and Dispatch Records
