₹540 target for Vedanta Aluminium signals a 31% upside, with the brokerage keeping a buy rating and citing the stock's current trading below the ₹522 debut level.
Kotak notes a 12% free‑cash‑flow yield for FY27 and 13% for FY28, underscoring the company’s strong cost‑control through backward integration and a tightening global aluminium supply.
The unit, spun off from the Vedanta Group in June 2023, enjoys the highest analyst coverage among the demerged entities, 10 out of 11 rating it as buy, and maintains a price target of ₹540 against the current market floor.
Market sentiment remains cautious; shares are up 1.9% on Friday at ₹411.9, yet the stock has slipped 8% over the past month, reflecting broader sector volatility.
Kotak’s analysis suggests the risk‑reward profile remains attractive even under a bear commodity scenario, with capacity additions being constrained by execution challenges and an over‑estimated Indonesian supply wave.