ICICI Securities initiates coverage on Vedanta with 'buy' rating; target suggests 18% potential upside

Shares of the largecap diversified metals company traded with a cut even as domestic brokerage ICICI Securities has resumed its coverage on the stock. The stock at the last count was down over 1 per cent at Rs 503.25 per share on the BSE.

The brokerage firm believes that the company's growth shall be fuelled by its zinc business. Also, cost reduction in the aluminium segment will bode well for the company.

Furthermore, ICICI Securities is optimistic about the company's other segment and sees them to clock decent growth going forward. 

Additionally, the company is treading its growth path around two ‘Vs’ and one ‘C’ i.e. Volume, value, and cost reduction–across segments.

The stock of Vedanta hit its 52-week high price last week.

Factors seen to be positive for the stock

Sharp lowering of Vedanta Resources' debt and further anticipation of debt reduction of Rs 21,000 crore over a three year period will keep the dividend yield for the stock at a higher level.

Additionally, the company's plans are on track for volume-led growth in other segments.

Oil and gas segment is seen to be a beneficiary of the progressively higher share of RSC blocks.

Vedanta stock price

The stock in the last one year has delivered multibagger return of 125 per cent, with its 52-week low and high prices at Rs 211.2 and Rs 523.6 per share, respectively.