Vedanta shares up 5% after BoFA upgrade to ‘buy’

Core Viewpoint - Vedanta Ltd's shares experienced a significant increase of over 5% following an upgrade from Bank of America Corporation (BofA), which raised its price target to ₹840 from ₹480, indicating strong upside potential from current levels [1]. Group 1: Stock Performance - The stock reached a day's high of ₹731.50, reflecting a 5.2% increase from the previous close of ₹695.10 [1]. Group 2: Analyst Upgrade and Price Target - BofA upgraded Vedanta's stock rating from neutral to buy and set a new price target of ₹840 per share [4]. - The upgrade is attributed to an improved outlook on aluminium prices, supportive silver prices, and expectations of a healthy dividend yield [4]. Group 3: Financial Outlook - BofA estimates that Vedanta could achieve a dividend yield exceeding 6% by FY27E, making the stock more appealing to income-focused investors [4]. - The brokerage has raised its EBITDA estimates for FY26 to FY28 by 16–21%, driven by higher aluminium price forecasts and improved financial stability [6]. Group 4: Company Financial Stability - The upgrade reflects growing confidence in Vedanta's financial stability, with significant deleveraging at the parent company alleviating concerns regarding potential increases in brand-fee rates or inter-corporate loans [5]. - The improvement in the balance sheet is seen as reducing risk and enhancing corporate governance visibility [5]. Group 5: Earnings Drivers - Aluminium is identified as a key earnings driver for Vedanta, with expectations of firmer global prices enhancing earnings visibility [7]. - Steady silver prices and favorable currency movements are anticipated to further improve profitability across various segments [7].