Vedanta Aluminium shares could rise 31% as Kotak Neo sees tighter aluminium market supporting earnings

Vedanta Aluminium could see a 31 per cent upside from its current market price, with Kotak Neo retaining a ‘Buy’ rating and a price target of INR 540 as it expects a firm aluminium market to support the company's earnings growth.

The research house expects global aluminium markets to remain tight through calendar year 2028, with project execution challenges potentially limiting the pace of new supply from Indonesia. It said the market may be underestimating the durability of the aluminium upcycle and Vedanta Aluminium's earnings growth potential.

Vedanta Aluminium Metal shares were trading 3.02 per cent higher at INR 416.50 on Friday, September 18, 2026, compared with the previous close of approximately INR 404.30. The stock has declined around 8 per cent over the past month.

At INR 411.90, Kotak Neo's INR 540 price target implies an upside of around 31 per cent for Vedanta Aluminium. The company is expected to benefit from stronger aluminium market conditions, higher production volumes and lower costs as it expands its backward integration.

Kotak Neo expects Vedanta Aluminium to deliver sector-leading volume growth, while generating a free cash flow yield of 12 per cent in FY27 and 13 per cent in FY28. Its scenario analysis also suggests that the stock's risk-reward remains favourable even under a bearish commodity price assumption.

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Vedanta Aluminium share price

The global aluminium supply outlook remains central to the investment case. Kotak Neo said concerns over a large wave of new supply from Indonesia may be overstated, with project execution challenges likely to restrict the pace of capacity additions. The resulting tighter supply environment is expected to support aluminium prices and provide a favourable backdrop for producers such as Vedanta Aluminium.

Higher volumes and cost efficiencies from greater backward integration are also expected to support earnings growth and cash generation over the next two financial years.

Vedanta Aluminium began trading separately on the NSE and BSE on June 15 following the Vedanta Group's demerger. The stock debuted at INR 522 on the NSE and INR 527 on the BSE, compared with Friday's market price of INR 411.90.

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