CLSA on Vedanta Aluminum ; O-P, TP Rs 525

2Q results were slightly ahead of expectations on lower costs. Driven by ramp up of smelter and cost saving projects, at spot LME, VAML expects to exit FY27 with an Ebitda run-rate of US$5bn. Focus will also be on capital allocation and next leg of expansion (3mt smelter) by end-FY28. Current price reflects an LME aluminium price of US$2,650 (spot: US$3,100) & a target multiple of 5x (vs 6x in base case) At 4x FY28 attributable EV/Ebitda (19% FCF yield), see a compelling risk-reward

VEDANTA LIMITED

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