Vedanta shares fall 30% from 52-week high; time to buy, sell or hold?

Shares of Vedanta Ltd have fallen 30% from their 52-week high reached in the beginning of this year. Vedanta stock, which touched a 52-week high of Rs 340.75 on January 20 this year, ended at Rs 238.25 in the previous session on BSE. The stock of the mining and metal major ended 2.10% higher on Monday against the previous close of Rs 233.35 on BSE. The stock hit a 52-week low of Rs 232 on August 16, 2023.

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During the session, the Vedanta stock rose 2.84% intraday to Rs 240 on BSE. A total of 11.41 lakh shares of the firm changed hands amounting to a turnover of Rs 27.15 crore on BSE. Market cap of the Vedanta rose to Rs 88,562 crore. In terms of technicals, the relative strength index (RSI) of Vedanta stands at 29, signaling the stock is trading in the oversold territory. The stock has a one-year beta of 1.2, indicating high volatility during the period. Vedanta stock is trading lower than the 20 day, 50 day, 100 day and 200 day but higher than the 5 day and 10 day moving averages.

Vedanta shares have lost 25% this year and fallen 11.76% in a year.

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On August 4, the metal stock hit a low of Rs 245.55 on BSE. The fall came after Twin Star Holdings, the majority shareholder among Vedanta’s promoters, offloaded 15.4 crore shares or 4.14% stake in the company on August 3. The transaction was done at a weighted average price of Rs 258, a 5% discount to the closing price on August 2. Promoters held majority stake in Vedanta at 68% at the end of June quarter and Twinstar Holdings owned 46.4% stake.

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Here’s a look at what analysts said on the outlook of the Vedanta stock.

Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher said, "The stock has corrected from its 52-week high of Rs 340 and is now trading near its 52-week low level, which is at Rs 232. Vedanta has strong resistance near the Rs 260 level, and a close above Rs 260 will see the stock moving towards the Rs 275–280 levels and downside below Rs 232. The next level of support lies around the Rs 220 zone."

Abhijeet from Tips2trades said, "Vedanta is bearish but also oversold on the Daily charts with strong resistance at Rs 246. Investors should buy only if Daily close is above this resistance. Next support will be at Rs 228.65."

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10 promoters held 68.11 per cent stake in the firm and 1565253 public shareholders owned 31.81 per cent or 118.24 crore shares at the end of June 2023 quarter. Of these, 15.28 lakh resident individuals held 37.35 crore shares or 10.05% stake with capital up to Rs 2 lakh. Only 24 resident individuals with 0.22% stake held capital above Rs 2 lakh at the end of June 2023 quarter.

Vedanta logged a 40% fall in net profit to Rs 3308 crore in the first quarter. Revenue fell 13% to Rs 33,242 crore in Q1 from Rs 38,251 crore during Q1FY23. The company declared an interim dividend of Rs 18.5 per share.