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Investing.com - CLSA has raised its price target on Vedanta Ltd. (NYSE:VEDL) to INR580 from INR520 while maintaining an Outperform rating on the stock. Currently trading at $5.57, InvestingPro data indicates Vedanta is undervalued based on its Fair Value model, with the stock showing impressive 6-month returns of 28.63%.
The mining conglomerate reported second-quarter fiscal year 2026 EBITDA of INR114 billion, representing a 16% quarter-over-quarter increase, which aligned with consensus expectations. The company’s last twelve months EBITDA stands at $4.93 billion, with an attractive EV/EBITDA ratio of 6.2.
Vedanta has provided guidance for fiscal year 2026 EBITDA exceeding US$6 billion, compared to CLSA’s estimate of US$5.7 billion, with first-half results already reaching US$2.5 billion. The company attributes this outlook to higher commodity prices and operational improvements, including lower aluminum cost of production and increased power sales. InvestingPro data reveals Vedanta offers a substantial 10.16% dividend yield, with dividend growth of 134.09% in the last twelve months.
CLSA identified the ramp-up of expansion projects and backward integration initiatives, particularly in aluminum, power, and zinc, as key drivers for Vedanta’s performance over the next few years.
The research firm noted that debt at parent company Vedanta Resources is now well funded, while the planned demerger is expected to be completed by the end of fiscal year 2026, with the outcome of Vedanta’s US$2 billion bid for Jai Prakash Associates representing another important development to monitor.
In other recent news, Vedanta Limited reported strong financial results for the second quarter of 2025. The company’s revenue increased by 6% year-over-year, reaching INR 39,218 crores. Additionally, Vedanta’s EBITDA rose by 12% to INR 11,612 crores. These results highlight the company’s significant growth amid its strategic expansions and operational efficiencies. Despite the positive financial performance, the stock price remained stable. These developments reflect Vedanta’s continued focus on enhancing its business operations. Investors and analysts are likely to pay close attention to how Vedanta’s strategies impact its future performance.
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