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.
