After Company's Investor Day, Motilal Oswal Issues Vedanta's Share Price Target

after company’s investor day, motilal oswal issues vedanta’s share price target

Vedanta share price target: Vedanta, the largest natural resources company in India, recently held its Investor Day. During this meeting, the company highlighted its ambitious $6 billion capex plan that aims to double its production capacities. Another significant strategic development that was stressed upon was Vedanta’s proposed demerger into six independent pure-play companies, which is expected to unlock stakeholder value and foster transparency. The new entities will span across aluminum, oil and gas, power, steel, and ferrous materials, alongside Vedanta Base Metals and Vedanta itself.

Vedanta is poised to benefit from the country’s robust domestic demand across several core sectors including manufacturing, automobile, construction, infrastructure, and energy.

Vedanta Share Price Target

Despite the optimistic growth narrative, Motilal Oswal exercises caution, citing near-term headwinds and the challenges of a volatile global commodity market.

In the wake of Vedanta’s Investor Day, the brokerage house has reaffirmed its ‘Neutral’ stance on the natural resources giant, with a target price set at Rs 270. The target price represents a slight 3 per cent premium over Wednesday’s closing price of Rs 262.8 apiece for the share.

Motilal Oswal On Vedanta Stock

Elevated borrowing costs are particularly noted as a potential risk factor for Vedanta’s deleveraging plans. The company has targeted a $3 billion reduction in debt over the next three years at its holding company level.

The report underlines that the proposed demerger and the ongoing liability management efforts should contribute to a more balanced risk structure. Further, Motilal Oswal also said, “we believe that despite VEDL undertaking multiple capex to expand its capacities across verticals, this will continue to exert pressure on the company’s cash flows.”

The heightened cost of capital could pressure the company’s ability to deleverage and potentially impact its dividend payouts, which are critical for the holding company’s debt reduction.

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