Buy Vedanta Ltd. target Rs 425 : Edelweiss Securities

Edelweiss Financial Services has Buy on Vedanta Ltd. with a target price of Rs 425.
The current market price of Vedanta is Rs 301.5.
Time period given by analyst is Long Term when Vedanta Ltd. price can reach defined target.
Investment Rationale by EdelweissVedanta’s (VEDL) acquisition of Electrosteel Steels (ELSS) as value accretive in the near term as: i) EV/t of $546 is significantly lower compared to recent transactions; ii) EBITDA/t accretion potential via captive iron ore use & capacity ramp up; and iii) opportunity to expand beyond 2.51mtpa. Assuming EBITDA/t of INR6,500-7,000 post capacity ramp up and iron ore self sufficiency, Edelweiss Securities envisages returns for VEDL’s shareholders to be between 20 per cent and 25 per cent. The brokerage house maintained ‘Buy’ on Vedanta with a target price of Rs 425.