Vedanta Ltd's shares rose as much as 7.7 per cent on Wednesday to their highest in nearly two years after CLSA upgraded the stock by two notches to "buy" from "underperform," expecting the miner to benefit from an ongoing metal price surge.

The company's shares have increased nearly 40 per cent so far this year, compared with a 13 per cent gain in the Nifty Metals index, against the backdrop of a jump in industrial and precious metals prices on expectations of global demand.

Vedanta's shares were last up 7.1 per cent at 362 rupees on Wednesday.

CLSA also raised its price target on the company's stock to ₹390 from ₹260, which is second highest after Nuvama's ₹394.

Of 12 analysts covering Vedanta's shares, six have a "buy" rating with a median price target of 305 rupees, according to LSEG data.

In addition to higher commodity prices, Vedanta's "efforts to raise capacity and profitability across segments through its ongoing capex program augurs well," CLSA said.

Vedanta's shares fell 16.2 per cent last year after subdued quarterly results, which had prompted billionaire Anil Agarwal to undertake a sweeping overhaul that would carve up the metals-to-oil conglomerate into six separate businesses.

The group's shares were also under pressure due to parent Vedanta Resources' high debt levels and a string of credit downgrades for the parent.

While the parent's debt has reduced by $3.5 billion over the past two years, Vedanta Ltd's debt has increased by $4.7 billion to $7.5 billion, which "will be key to watch," CLSA said.

The brokerage also raised the estimate for Vedanta Ltd's earnings before interest, taxes, depreciation and amortization for 2024-2026 between 4 per cent and 13 per cent.