Motilal Oswal has maintained its “buy” rating on Vedanta Aluminium Metal, saying production growth, lower costs and a bigger share of value-added products could support a multi-year expansion in earnings.
The brokerage has set a target price of INR 540 (USD 5.67) per share, implying potential upside from the stock’s recent level of about INR 451 (USD 4.73). Vedanta Aluminium shares were trading higher in Wednesday morning deals after gaining about 3 per cent over the previous week.
Growth outlook drives bullish call
Motilal Oswal expects Vedanta Aluminium’s revenue, EBITDA and profit after tax to grow at compound annual rates of about 11 per cent, 18 per cent and 23 per cent, respectively, between financial years 2026 and 2028.
The brokerage’s investment case rests on rising aluminium output, deeper backward integration and a larger contribution from value-added products. It also pointed to strong domestic demand and supply constraints in China, where aluminium production is limited by an output cap.
Backward integration, including access to inputs and captive resources, can help aluminium producers manage costs. A higher contribution from value-added products, meanwhile, could support margins relative to the sale of primary metal alone.