Vedanta Limited has caught fire on Dalal Street. The stock recently blasted to a fresh 52-week high of ₹537, closing strongly at ₹532 with a solid 7.97% gain over the past five trading sessions alone. Investors are rushing in, driven by two massive catalysts: the much-awaited demerger into five pure-play companies and the clean exit from the debt-heavy JP Associates deal. Add rising commodity prices, record cash flows, and aggressive capacity expansion, and Vedanta suddenly looks like one of the most compelling large-cap stories in the Indian metals and mining space for 2025–2030.
Why Vedanta Share Price is Surging Right Now
Vedanta share price has outperformed both the Nifty Metal index and the broader Sensex by a wide margin:
- 1 Week Return: +8.45% (vs Sensex +1.27%)
- 1 Month Return: +8.69% (vs Sensex +2.43%)
- 3 Months Return: +24.46% (vs Sensex +6.98%)
- Year-to-Date 2025: +20.75% (vs Sensex +10.03%)
- 5-Year Return: +341% (vs Sensex +73%)
The stock is trading comfortably above its 5, 20, 50, 100, and 200-day moving averages — a textbook sign of strong bullish momentum.
Vedanta Demerger 2025: The Biggest Value-Unlocking Event in Years
Anil Agarwal-led Vedanta is all set to split the ₹2 lakh crore+ conglomerate into five independent listed entities:
- Vedanta Aluminium
- Vedanta Oil & Gas
- Vedanta Power
- Vedanta Base Metals (Zinc, Lead)
- Vedanta Steel & Ferrous Materials
For every 1 Vedanta share held, investors will receive 1 share each in the four new entities + retain the existing Vedanta (primarily holding Hindustan Zinc stake post-demerger). This means current shareholders will end up with 5 listed stocks instead of 1 — a direct 5X exposure to pure-play businesses.
This move eliminates the holding company discount, simplifies the structure, attracts sector-specific investors and funds, and allows each business to pursue independent growth and capital-allocation strategies.
Global brokerage houses such as JPMorgan, CLSA, and Motilal Oswal have already turned bullish, projecting 30–70% upside purely from the demerger value unlocking.
Debt Worries Easing Fast – JP Associates Deal Cancelled
Vedanta has officially walked away from acquiring the debt-laden JP Associates cement assets. Adani Group won the bid instead. This is massively positive because:
- Vedanta avoids adding ₹20,000+ crore of extra debt
- Net debt remains under control at ~1.2x Debt-to-EBITDA
- Interest coverage ratio stands strong at 5.4x
- Credit rating agencies are likely to view this discipline favorably
Investors hated the JP deal. Its cancellation has removed a major overhang and restored confidence in management’s capital-allocation discipline.
Hindustan Zinc Shines Bright – Silver at 15-Year High
Vedanta owns ~64.9% in Hindustan Zinc (HZL), India’s only primary silver producer. Silver prices have just crossed $38/oz — the highest in over a decade — driven by industrial demand (solar, EVs, 5G), falling global inventories, and expected Fed rate cuts.
HZL contributes 40–45% of its EBITDA from silver and is aggressively expanding silver production capacity from ~700 tonnes to 1,500 tonnes per annum. This alone can add thousands of crores to Vedanta’s cash flows in the coming years.
Hindustan Zinc itself hit a new all-time high recently, delivering stellar returns to Vedanta as the parent.
Record Operating Cash Flow & Robust Financial Health
Vedanta generated a record ₹39,562 crore in operating cash flow in the last reported period — the highest ever. Key financial highlights:
- Annual Sales: ₹1,57,262 crore
- ROCE: 31.42% (excellent capital efficiency)
- Compounded Sales Growth (5 years): ~15%
- Compounded Operating Profit Growth: ~19.5%
- Profit After Tax (9 months): ₹9,963 crore (+22.92% YoY)
The company is firing on all cylinders across zinc, aluminium, oil & gas, and power.
Massive Capacity Expansion Plans Underway
Vedanta has lined up one of the most ambitious capex cycles in Indian corporate history:
- Aluminium smelter capacity: 2 MTPA → 6 MTPA by FY28 (₹13,226 crore investment)
- Zinc & Lead: 1.1 MTPA → 1.38 MTPA by FY29
- Oil & Gas: Production to rise from 125–150 kboepd with multiple new blocks
- Steel: 3.5 MTPA integrated steel plant target by 2028
- Merchant Power: 2.9 GW → 4.78 GW
These expansions will drive volume growth of 15–20% CAGR over the next 4–5 years while global commodity cycles remain supportive.
Valuation: Still Trading at a Deep Discount
Despite the rally, Vedanta’s valuation remains extremely attractive:
- EV/EBITDA: ~5.2x (peer average ~8–10x)
- Enterprise Value to Capital Employed: only 2.6x
- P/B multiple significantly below historical averages
Analysts believe the sum-of-parts (SOTP) valuation post-demerger could be 50–80% higher than the current market price.
Key Risks Every Vedanta Investor Must Know
No investment is risk-free. The biggest concern remains:
Promoter Pledge: Almost 99.99% of promoter holding is pledged. While the underlying assets far exceed the loan value, any sharp correction in commodity prices could trigger technical margin calls and create short-term volatility.
Commodity Price Volatility: Zinc, aluminium, oil, and silver prices are cyclical. A global slowdown could hurt earnings.
Regulatory & ESG Scrutiny: Mining and oil & gas businesses face environmental and community challenges.
However, strong cash flows, deleveraging momentum, and the demerger roadmap significantly mitigate these risks.
Vedanta Share Price Target 2025–2026 – What Analysts Are Saying
- Motilal Oswal: ₹620 (Demerger upside + commodity tailwinds)
- JPMorgan: Overweight, Target ₹650+
- CLSA: Buy, Target ₹680
- Nuvama: Target ₹700+ post demerger listing
Many domestic brokerages see the stock crossing ₹800–900 within 18–24 months once the five entities list independently.
Final Verdict: Should You Buy Vedanta Shares Now?
Vedanta offers a rare combination in today’s market:
- Pure commodity leverage with rising zinc, aluminium, oil, and silver prices
- Transformational demerger that can unlock 40–70% value
- Record cash flows and aggressive growth capex
- Attractive valuation with strong analyst upgrades
For long-term investors comfortable with commodity and pledge risk, Vedanta looks like one of the best risk-reward large-cap ideas for 2025 and beyond.
Disclaimer: This article is for educational and informational purposes only. Please consult your financial advisor and conduct your own research before making any investment decision. Stock markets are subject to risks, and past performance is not indicative of future results.