Vedanta jumps 5% after Credit Suisse initiates coverage with Outperform sees 21% upside
According to the researchers, aluminium business is most important for incremental profits for the company. The researchers also added that the global supply-demand and surging raw material prices bodes well for aluminium.
On Friday, it was observed that the Vedanta shares rallied more than 5 percent intraday. It happened when the global investment firm Credit Suisse has initiated coverage with an outperform rating on the stock as it is a leveraged play on aluminium.
According to the experts, the target price is set at Rs 345 per share, implying the potential upside of 21.2 percent over Thursday’s closing price.
Various researchers have claimed that the aluminium business is most important for incremental profits. Global supply-demand and surging raw material prices bode well for aluminium, it added.
On zinc, Credit Suisse said prices have peaked and despite planned volume growth, Hindustan Zinc is fully valued. Much of the ex-Hindustan Zinc upside is purely execution-dependent.
Vedanta is not expensive even after adjusting for Hindustan Zinc but volume projections are below company guidance, which remains the risk to rating, it feels.
For now, the research house has also initiated coverage with neutral on Hindustan Zinc. Even after the recent decline in stock price, Hindustan Zinc traded significantly higher, it feels. They have set a target price at Rs 325 per share as the stock price is fully valued despite planned volume growth.
On the BSE, the stock price was quoting at Rs 298.35, up Rs 13.70, or 4.81 percent and Hindustan Copper was at Rs 91.70, up 0.66 percent, at 14:48 hours IST.