Shares of Vedanta Ltd are trading 17% lower to their 52-week high hit in January this year. The stock traded at Rs 281 today against the 52-week high of Rs 340.75 touched on January 20, 2023. Vedanta stock rose 0.61% to Rs 281 against the previous close of Rs 279.35 on BSE. Market cap of the firm stood at Rs 1.04 lakh crore. In a year, the stock is down 12% and fallen 9% this year. It hit a 52-week low of Rs 206.10 on July 1, 2022.
In terms of technicals, the relative strength index (RSI) of Vedanta stands at 50, signaling neither the stock is overbought nor oversold. The stock has a one-year beta of 1.5, indicating very high volatility during the period. Vedanta shares are trading higher than the 5 day, 20 day and 50 day moving averages but lower than 100 day and 200 day moving averages.
The PE ratio of Vedanta stands at 9.95 signaling the stock is undervalued compared to its industry. The PE of the mining industry stands at 14.39.
On the outlook of the stock, Abhijeet from Tips2trades said, “Vedanta is sideways to bearish on the Daily charts with strong resistance at Rs 287. A daily close below support of Rs 268 could lead to targets of Rs 261-250 in the near term."
The Anil Agarwal-led company on May 12 said consolidated profit fell 57 per cent year-on-year (YoY) to Rs 3,132 crore in the March quarter compared with Rs 7,261 crore in the corresponding quarter last year. Net sales in Q4 fell 5 per cent YoY to Rs 37,225 crore from Rs 39,342 crore in the corresponding quarter last year. Profit before exceptional items stood at Rs 3,885 crore, down 49 per cent. Consolidated EBITDA for the quarter stood at Rs 9,362 crore, with the EBITDA margin coming in at 29 per cent.
After the earnings, financial services firm Motilal Oswal said profit missed its estimate of Rs 3,700 crore. The miss was led by higher finance cost and depreciation, partially offset by higher other income and lower taxes, it said. It assigned a target price of Rs 280 for the stock.
"Globally, the commodities market is facing multiple headwinds such as inflationary pressure, weak macroeconomic scenario, recessionary pressures across Europe, liquidity crunch across some developing countries, muted demand pick-up from China and slowdown in Chinese real estate sector," it said.
"We have largely retained our FY24 Ebitda and APAT forecasts. We reiterate our Neutral rating on Vedanta with a SoTP-based target price of Rs 280. At CMP of Rs 275, the stock is trading at FY24E EV/Ebitda of 5.3 times and FY24E P/B multiple of 2.2 times. While we marginally reduce our aluminum volume and EBITDA/tonne assumptions, savings from captive/linkage coal should help offset the downtrend," it said.
Nuvama Institutional Equities reduced its 12-month share price target to Rs 367 from Rs 428 earlier.
Vedanta Resources’ debt obligation stood at $2 billion (it repaid $1 billion in Q1FY24, total debt remains $7 billion), said Nuvama.
"We believe Vedanta will continue pay higher dividend in FY24E/FY25E and accordingly factor in dividend per share of Rs 45 in each of FY24E/FY25E. Vedanta is awaiting final approval from lenders to shift Rs 12,590 crore from general reserve to retained earnings, which will help in dividend payment," it said.
The benefits from cost savings in aluminium via the 3 MTPA alumina expansion; and all coal blocks starting, will show from FY25E and reduce cost of production (CoP) on a structural-basis.
"Consolidated net debt will rise to Rs 65,699 crore (FY23: Rs 55,300 crore) due to higher dividend payout. A 16 per cent dividend yield makes the stock attractive," Nuvama added.
In its Q4 update, the Mumbai-based mining company said that its total aluminium production came almost flat. Vedanta said total aluminium production rose 0.3 percent at 574 kt in Q4 as compared to 572 kt in the same period last fiscal. It also added that the cast metal aluminium production rose 1 percent quarter-on-quarter with Jharsuguda ramp up.
Watch: HAL, Bharat Dynamics among stocks at multi-year highs; multibaggers give 5-year breakouts
Watch: Multibagger stocks: Hardwyn India, De Nora, other shares that rallied up to 250% in 1 year
Also read: Adani Total Gas shares continue to fall, hover near 52-week low; here's what analysts say
Also read: ITC shares gain ahead of Q4 results. Demerger, dividend & other things to watch