1:6 Split Of Metal Company: Vedanta Stock Jumped 141% Ahead Of Dividend, Record Date Set On Oct 16; BUY Time?

Metal giant company, Vedanta Limited share price neared to its all-time high on September 25, 2024, after the company announced its plan for dividend payout. A board of meeting is scheduled on October 8 to consider the upcoming reward, and Vedanta has fixed the record date for the same. The consensus recommendation of analysts for Vedanta is BUY. However, the target price has been broadly lowered.

Vedanta share price ended at Rs 501.85 apiece, up by 4.64% on BSE after hitting an intraday high of Rs 504.75 apiece on the September 25 session. The market cap is at Rs 1,96,242.82 crore.

With that, the large stock is near its all-time high of Rs 506.85 apiece, while it has surged by 141% from its 52-week low of Rs 207.85 apiece. YTD, Vedanta stock is up by 30% on BSE.

The latest upside comes after Vedanta announced that a meeting of the board of directors is proposed to be scheduled on Tuesday, October 08, 2024, to consider and approve the Fourth Interim Dividend on equity shares, if any, for the Financial Year 2024-25.

Vedanta Dividend:

For the upcoming dividend, the company said the record date is fixed on Wednesday, October 16, 2024, to determine eligible shareholders.

Earlier, in 2024, Vedanta paid a 400% second interim dividend worth Rs 4 per share, while the first interim dividend was 1,100% valued at Rs 11 per share. The third interim dividend was a whopping 2,000% worth Rs 20 per share and for this, Vedanta turned ex-dividend on September 10, 2024.

In FY24, Vedanta delivered a 2950% dividend worth Rs 29.5 per share.

Vedanta is among the highest dividend-paying stocks in the large-cap and metal segments.

On the current market price, Vedanta's dividend yield is at 5.88%.

Vedanta BUY/SELL?

As per the Trendline data, the consensus recommendation from 14 analysts for Vedanta Ltd. is BUY. EPS is expected to grow by 206.7% in FY25. However, the 1-year average target price is set at Rs 479.79 apiece, hinting at a 4.4% potential downside ahead.

Meanwhile, broker Antique Stock Broking has recommended HOLD with a target price of Rs 457 on Vedanta.

Vedanta's Business Split Of 1:6:

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.

As part of the demerger plan, for every share of Vedanta, shareholders will receive one share of each of the five newly listed companies. After the demerger, the businesses of Hindustan Zinc and the electronics business will remain with Vedanta Limited. The company is expecting to complete its demerger by December 2024 end.

In Q1FY25, Vedanta reported consolidated revenue of Rs 35,239 crore, up 1% QoQ and 6% YoY. Meanwhile, consolidated EBITDA stood at Rs 10,275 crore, up 15% QoQ and up 47% YoY. Also, profit after tax of the company came in at Rs 5,095 crore, up 124% QoQ and 54% YoY. Liquidity improved by 17% YoY with Strong Cash and Cash Equivalent of Rs 16,692 crore. Further, Vedanta's net debt stood at Rs 61,324 crore as on 30th June 2024.

Vedanta Limited ("Vedanta"), a subsidiary of Vedanta Resources Limited, is one of the world's leading critical minerals, energy and technology companies spanning across India, South Africa, Namibia, Liberia, UAE, Saudi Arabia, Korea, Taiwan and Japan with significant operations in Oil & Gas, Zinc, Lead, Silver, Copper, Iron Ore, Steel, Nickel, Aluminium, Power & Glass Substrate and foraying into electronics and display glass manufacturing.