Vedanta target price: Why should you buy stock post demerger - Rationale explained

Shares of Vedanta Ltd have been rallying higher since its demerger on April 30 as the metal miner has gained nearly 20 per cent in the first half of May. Interestingly, the stock has seen its first brokerage report post the demerger of its equity shares, which suggest more steam left in the counter.

Earlier this month, Vedanta had demerged its four businesses into Vedanta Iron & Steel, Malco Energy Ltd, Vedanta Aluminium Metal Ltd and Vedanta Power, which will make their stock market debut in the coming weeks. All the eligible shareholders of the scheme shall get one stock of each company for every one share of the Vedanta Ltd held on the record date.

Shares of Vedanta dropped more than 3.2 per cent on Monday to Rs 320.45, commanding a total market capitalization of more than Rs 1.27 lakh crore. The stock recently hit its adjusted 52-week high at Rs 340.70 on Thursday, May 14. It has more than doubled investors wealth from its adjusted 52-week low at Rs 151.13 hit on August 29, 2025.

Vedanta’s demerger marks a shift from a diversified structure to five focused, sector-leading businesses - each with clear strategic direction, capital allocation discipline, and growth visibility. However, the brokerage firms did not review its quarterly results post the spin-off of the business and await clarity on the stock.

Anil Agarwal-led Vedanta is one of India’s largest natural resources companies with operations across zinc, silver, copper, ferrochrome and critical minerals. It supplies to industries such as infrastructure, construction, automobiles, renewable energy, electronics, defence and manufacturing across both domestic and global markets.

India contributes 65 per cent of revenues, while the balance comes from international operations and exports across markets such as China, UAE, Malaysia, Korea and Japan. The core of the business is its 61 per cent stake in Hindustan Zinc, a prime integrated zinc-lead-silver producer with over 1.2 million tonnes of annual mined metal capacity and 1 million tonnes of refined zinc capacity.
 

Vedanta Q4 results
In the fourth quarter ending March 31, 2026, Vedanta reported a 89 per cent year-on-year (YoY) jump in the net profit to Rs 9,352 crore, while its revenue surged 29 per cent YoY to Rs 51,524 crore. Its Ebitda for Q4FY26 rose 59 per cent YoY to Rs 18,447 crore, while margins improved 915 basis points to 44 per cent for the quarter.
 

Vedanta target price
Vedanta’s continuing operations now represent a focused zinc-silver-copper business where profitability visibility has improved materially after the demerger. The company benefits from integrated operations with captive mine and smelters already in place, allowing a larger part of higher metal realizations to directly flow into profitability, said BP Equities.

"Commodity prices across silver, zinc and copper are expected to remain supportive due to continued demand from electrification, renewable energy, infrastructure and EV-related investments, although the sharp rally seen during FY26 is unlikely to repeat at the same pace and therefore our revenue growth assumptions remain relatively moderate over FY27-FY29," it said

Reduction in the conglomerate discount following the demerger-led simplification of the business structure also supports our constructive outlook on the stock. Strong internal cash generation should continue to support ongoing capex and gradual deleveraging without materially stretching the balance sheet," BP Equities added with a 'buy' rating and a target price of Rs 387.

Ahead of the demerger, ICICIDirect said that Vedanta’s stock price is expected to trade in the range of Rs 300-325 per share. "This estimate is indicative, as we await exact allocation of net debt across the resulting entities. The residual Vedanta will drive bulk of its value from its stake in Hindustan Zinc Ltd," it added.

Vedanta Tech view
Vedanta remains in a strong uptrend, witnessing steady buying momentum after breaking out from its previous consolidation range. The chart structure remains bullish as the stock is consistently forming higher highs and higher lows, reflecting sustained strength in price action. The recent rally above the Rs 320 zone confirms continuation of the broader uptrend, said Master Capital.

"Momentum indicators continue to support the ongoing upmove, although some short term consolidation cannot be ruled out after the sharp rally. As long as the stock sustains above the Rs 315-320 support zone, the bullish setup remains intact and further upside toward Rs 355-365 levels remains possible in the coming weeks," the brokerage added.