Imagine buying a full pizza. Then someone cuts it into five slices and hands you four extra plates. That is exactly what happened to Vedanta shareholders on May 1. The record date is done. The demerger is real. But here is the million-rupee question – are these demerged entities worth more than the whole?
What really changes after a demerger is done?
With the record date behind and the stock is already trading ex-demerger, the focus has now shifted to what comes next for shareholders holding the restructured business.
According to the brokerage report by Emkay, this transition could reshape how the company is valued. The brokerage has maintained a ‘Buy’ rating and the sum-of-the-parts valuation stands Rs 900, implying a potential upside of about 16%.
Vedanta: Quarterly performance
Before the restructuring took centre stage, the Anil-Agarwal led metal and mining major Vedanta reported a strong performance in the Q4FY26.
The company reported earnings before interest, tax, depreciation and amortisation (EBITDA) of Rs 18,450 crore.
The brokerage house Emkay in its report noted, “Vedanta reported a strong Q4FY26 EBITDA of Rs 18,450 crore (+21.6% QoQ), broadly in line with our estimates.”
The growth was largely driven by metals, particularly aluminium and zinc, which continue to dominate the earnings mix.
The report further added, “Notably, Aluminium and Zinc together contributed 88% of consolidated EBITDA in Q4.”
Vedanta demerger: Split into focused businesses
Now that the demerger has played out, Vedanta is no longer just one diversified entity. Instead, investors are looking at a set of focused businesses across aluminium, power, oil and gas, and iron and steel.
This shift changes how the market looks at the company. Instead of valuing everything together, post the demerger now, each business will be judged based on its own performance and potential.
For shareholders, it also means their investment is no longer tied to a single combined entity, but spread across multiple segments.
Vedanta demerger: Why the street is watching valuations closely
The key argument behind the demerger is valuation.
According to the Emkay report, companies that focus on a single business tend to attract better valuations than diversified players.
“The restructuring is expected to drive upside through potential valuation re-rating, as pure-play entities typically command a premium,” the report explained.
Segments like aluminium and power are expected to benefit more from this shift. At the same time, the brokerage flagged that some parts of the business may already be fairly valued, limiting immediate gains there.
Vedanta demerger: Commodity tailwinds still in play
Even beyond the demerger, the operating environment remains supportive. Commodity prices, especially for aluminium and zinc, have stayed firm.
“With Aluminium and Zinc QTD prices tracking above Q4 averages…the outlook for margin expansion remains firmly intact,” the brokerage noted.
On top of that, the company has guided for cost reductions going forward.
Vedanta demerger: Debt reduction adds another layer
Another part of this development that often gets less attention is the balance sheet. Vedanta has been steadily reducing its debt levels, and the improvement is now visible in the numbers.
Emkay in its report noted, “Vedanta continues to make steady progress on deleveraging, with net debt/EBITDA reduced to 0.95x.”
What should investors watch now?
The structure has changed. The shares have been adjusted. Now, the key thing to watch is – how the market values each piece.
Will aluminium and power attract premium valuations? Will the simplified structure make the businesses more attractive to investors?
According to the brokerage report, the sum-of-the-parts valuation stands at Rs 900, and the ‘Buy’ rating remains unchanged.
Disclaimer: The information provided above includes market analysis and brokerage projections regarding the Vedanta demerger and should be used for informational purposes only. Investment in the securities market is subject to market risks; please read all related documents carefully before investing. This content does not constitute a specific offer or solicitation to buy or sell securities, and readers are advised to consult with a SEBI-registered investment advisor before making any financial decisions based on these valuations or upside targets.
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