Vedanta Aluminium shares rise nearly 2% as CLSA initiates Outperform call, sees 18% upside potential. Here's why

Published 24 June 2026 · finance

The shares of Vedanta Aluminium Metal rose nearly 2% to Rs 465 on the BSE on Wednesday after CLSA initiated coverage on the stock with

The shares of Vedanta Aluminium Metal rose nearly 2% to Rs 465 on the BSE on Wednesday after CLSA initiated coverage on the stock with an ‘Outperform’ rating citing various tailwinds, with a target price of Rs 540 apiece, implying an upside potential of more than 18% from the stock’s previous closing price. CLSA said in its note that its rating is supported by a higher for longer aluminium cycle and robust operational tailwinds. "We expect backward integration to lift the company into the first decile of the global cost curve, along with near term volume growth visibility. Strong FCF generation (even after assuming aluminium LME at a discount to spot) is likely to support deleveraging and dividend payout,” it added.Aluminium upcycle is underpinned by resilient demand from electrification and substitution-led end markets, and constrained supply growth, resulting in a tight balance, CLSA said, adding that it expects incremental supply to remain modest at.1.5mt/1.9mt in 2026/2027CL, largely driven by additions in Indonesia.

Concentrated and volatile upstream inputs further elevate cost pressures and supply risks, supporting a higher for longer pricing environment, it further said.Also Read | Vedanta Aluminium vs Power vs Oil & Gas vs Iron & Steel | Which stock should you buy?The international brokerage said that its target price of Rs 540 is based on 6x FY28 CL EV/Ebitda. Every $100/ton change in aluminium price impacts its valuation by 7%.Vedanta Aluminium share priceVedanta Aluminium shares debuted at Rs 522 apiece on NSE on Monday after a special pre-open session. The largecap company’s market capitalisation at debut stood at more than Rs 2 lakh crore, surpassing parent Vedanta’s total market capitalisation. After debut, the stock tumbled nearly 13% to close at Rs 456.61 apiece on Tuesday. The company’s market capitalisation at the end of last session stood at over Rs 1.78 lakh crore.Also Read | Vedanta Aluminium lists at Rs 527 on BSE after demerger.

Is it the group’s new crown jewel?Is Vedanta Aluminium the new 'crown jewel' of Vedanta?Before the market debut, ICICI Direct said that Vedanta Aluminium stood out as the most attractive entity. “This is supported by its strong contribution to group revenues and margins, along with favourable industry dynamics such as tight global supply, elevated aluminium prices, and ongoing capacity expansions driving volume growth,” it added.ICICI Securities was also the most bullish on the aluminium business, saying the Iran-US conflict could result in a larger-than-expected aluminium supply deficit. It called Vedanta Aluminium, the group’s new “crown jewel”.Vedanta Aluminium Metal is the largest aluminium producer in India, as well as in the US, Europe, the Middle East, Australia and Africa, according to the company. It produced more than half of India’s aluminium at 2.42 million tonnes in FY25, as stated on their website. It operates a 5 MTPA alumina refinery in Odisha’s Kalahandi district, along with the world’s largest aluminium plant at Jharsuguda, Odisha, with a 1.85 MTPA capacity.