Up 67% in 3 months: Brokerages increase target of this mining stock; can give up to 43% returns; check details

Domestic equity indexes rose to new highs on Tuesday, June 18 after a long weekend as the market was closed on Monday on the occasion of Bakra Eid. 

The Sensex closed 308.4 points, or 0.4 per cent, higher at 77,301.1, while the Nifty50 advanced 92.3 points, or 0.4 per cent, to 23,557.9. According to the analysts, the robust local fund inflows and optimistic global market signals continue to boost the mood on Dalal Street.

Meanwhile, brokerages are bullish on a mining company and recommend buying the stock from a long-term perspective.

Stock to buy

Brokerage Nuvama suggests buyers add this stock to their portfolio for one year. The brokerage has given a target price of Rs 644 each. This implies to an increase of around 43 per cent from its current price. On Tuesday, 18 June, the shares of Vedanta closed at Rs 452.5 each, up 1.20 per cent on BSE. 

Nuvama recently took information on the company's cost reduction and value addition. The brokerage team visited Vedanta's plants. This includes the aluminum plant in Jharsuguda (Odisha) and the zinc mines and smelter in Dariba, Rajasthan.

The brokerage says that by FY26E, the company's zinc profit will surpass aluminum. The contribution of both segments in FY26E EBITDA will be around 84 per cent. It is 67 per cent in FY24. The brokerage has increased FY25E/26E EBITDA by 5 per cent/6 per cent. Meanwhile, the demerger of companies may get the approval of lenders by the end of FY 2025.

Another brokerage CLSA has also given a 'buy' call on Vedanta and increased its target price from Rs 430 to Rs 520. This means, the stock can give up to 15 per cent returns from its today's losing price.

CLSA says "The company's focus is on operational improvement. The aluminium business will strengthen the company's growth."

Vedanta share price history  

The stock gained over 60 per cent in a year. The stock has shown a rise of 74 per cent in the last six months. The return in three months was 67 per cent. The stock has given returns of about -1.3 per cent in the last month. The 52-week high of the stock on BSE is 506.9 and the low is 207.9. The market cap of the company is more than Rs 1,68,184.6 crore.

The views/suggestions/advice expressed here in this article are solely by the brokerage firm. Zee Business suggests its readers consult their investment advisers before making any financial decision.