Vedanta Ltd, the dividend king stock, is all set to declare its Q3 financial results on January 31. The announcement of the date was made on Monday when Vedanta stock dipped by over 4% on BSE. Vedanta followed the market trend of extreme bearish. Nonetheless, the stock is still trading better than peers like Tata Steel, compared to its 1-year lows. Going ahead, demerger development or views from Vedanta management will be keenly watched this week. The demerger of Vedanta into six entities will result in Vedanta shareholders earning 5 new shares on every 1 Vedanta stock they hold. Apart from this, Vedanta is expected to record steady growth in revenue and EBITDA in Q3FY25.
Vedanta Share Price:
Vedanta stock price closed at Rs 423.20 apiece on BSE, down by 4.3% with a market cap of Rs 1,65,487.62 crore. The stock's 52-week high and low are at Rs 527 apiece and Rs 249.75 apiece respectively.
Vedanta Q3 Results Preview:
In its regulatory filing, Vedanta said, "We wish to inform you that the meeting of the Board of Directors of the Company will be held on Friday, January 31, 2025, to inter‐alia consider the Unaudited Financial Results of the Company for the Third Quarter and Nine Months ended December 31, 2024."
Brokerage Antique Stock Broking said, "Consolidated revenue is forecasted to grow 5.2% YoY to INR 373.9 bn aided by higher revenues from the aluminium segment. EBITDA at INR 104.9 bn is expected to improve 23.0% YoY and 6.8% QoQ on account of improved performance from the zinc and aluminium segments partially offset by weaker performance across oil and gas and iron ore segments. Adjusted profit is expected to be lower by 10.3% YoY and 0.6% QoQ to INR 31.7 bn (as compared to INR 35.4 bn in 3QFY24 and INR 32 bn in 2QFY25)."
Furthermore, Kotak Institutional Equities said, "We forecast a 6% qoq increase in EBITDA (+22% yoy) due to higher commodity prices across major segments, particularly in zinc/silver and aluminium."
Adding Kotak said, "We forecast (1) Aluminum EBITDA to increase qoq by 4.6% (+51% yoy) primarily led by higher LME prices (2) Oil and Gas division to witness EBITDA decline of 9.5% qoq on lower volumes (3) Zinc India division to see 7.4% qoq increase in EBITDA on the back of higher zinc/silver prices."
Vedanta Demerger:
Among much-awaited developments in Vedanta is its demerger into six businesses, aka a 1:6 ratio. Vedanta has received approval to demerger metals, power, aluminium, and oil and gas businesses to unlock potential value. After the exercise, six independent verticals - Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, Vedanta Base Metals and Vedanta Limited - will be created.
Under the demerger agreement, every eligible shareholder of Vedanta will get one share each in the five newly listed companies, against their 1 existing share in Vedanta.
As per ICICI Direct blog, Vedanta Limited Chairman, Anil Agarwal, recently told media that the demerger process is expected to conclude in the first quarter of next year. He added, "We will have a very good dividend policy. Share price will do very well according to me," he added. The Vedanta Chairman went on to add that the demand for businesses under these companies remains strong.
Vedanta Share Recommendation:
Kotak has recommended SELL on Vedanta for target price of Rs 665.
However, as per Trendlyne data, the consensus recommendation from 15 analysts for Vedanta Ltd. is BUY. EPS is expected to grow by 206.2% in FY25. The average 1-year target price on Vedanta is of Rs 513.27 apiece, hinting at over 21% potential upside.
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