Nuvama initiates Buy call on Vedanta Aluminium shares, expects profitability to exceed historical average. Here's why

Nuvama and Motilal Oswal have both initiated Buy coverage on Vedanta Aluminium, with Motilal Oswal setting a target price of Rs 540 per share. Nuvama forecasts an EBITDA CAGR of 29% over FY26-28, supported by a structural fall in cost of production from around $1,914 per ton to under $1,600 per ton and firm LME aluminium prices of $3,200/$3,000 in FY27/28. The company is expected to deleverage sharply with net debt declining from Rs 375 billion in FY26 to Rs 34 billion in FY28, while the stock, which listed at Rs 522 on June 15 after the Vedanta demerger, has corrected about 15% to Rs 443.80.