1:6 Split-Up Soon: Metal Giant Vedanta Shoots Up 9% To Hit New 52-Week High After CLSA Upgrade To BUY

Billionaire Anil Agarwal-backed Vedanta which has the highest dividend yield in the Indian market, recorded a massive bull run, taking its share price up by over 9% to hit a new 52-week high. Vedanta which had a dull 2023, is among the top-performing metal stocks of 2024. Its share price has rallied to nearly Rs 370 levels. The latest uptrend is after brokerage CLSA upgraded its stance on Vedanta to BUY.

At the time of writing, Vedanta's share price traded at Rs 368.40 apiece, up by 8.93% on BSE with a market cap of Rs 1,36,960.11 crore. The metal giant rose as much as 9.3% to hit a fresh 52-week high of Rs 369.60 apiece in early trade.

Global brokerage CLSA upgraded its rating on Vedanta to 'BUY' from earlier 'Reduce'. While maintaining a positive outlook, the brokerage also raised its target price on Vedanta to Rs 390 per share.

As per CLSA, Vedanta is well-placed to capitalise on the commodity upcycle on the backdrop of its diversified exposure. Additionally, Vedanta's focus on enhancing capacity and profitability across verticals supports the company's future growth prospects.

Vedanta delivered the highest ever annual volume across key businesses in FY24.

In Q4FY24, the company's alumina production at the Lanjigarh refinery at 484 kt, up 18% YoY and 3% QoQ driven by better operational performance, while its cast metal aluminium production at our smelters at 598 kt, up 4% YoY.

Also, its mined metal production was at 299 kt, up 11% QoQ, driven by a mix of improved mined metal grades and higher ore production across mines. Further, Vedanta recorded the highest-ever quarterly refined metal production at 273 kt, up 6% QoQ on account of better plant availability and up 1% YoY. Refined zinc production was at 220 kt, up 9% QoQ & 2% YoY. Refined lead production at 53 kt, lower 2% YoY and 5% QoQ.

For FY24, Vedanya posted the highest ever cast metal aluminium production of 2,370 kt at its smelters up 3% YoY. Vedanta posted the best mined metal production at 1,079 kt up 2% YoY, driven by improved mined metal grades. Refined metal also achieved its highest annual production.

Additionally, Vedanta announced fundraising of Rs 2,500 crore through issuance of 2,50,000 nos. Senior, Secured, Rated, Listed, Redeemable, Non-Convertible Debentures ("NCDs") of face value Rs 1 lakh each, on a private placement basis.

Apart from this, Vedanta is on track for the demerger of its key businesses, including aluminium, into separate listed companies and allocation of debt across the demerged entities that would be done in proportion to their assets, sources had said to GoodReturns.In earlier.

Vedanta's management has recently highlighted ambitious targets on volume growth and COP reduction across key businesses, to achieve VDL level EBITDA of ~US$5.6bn (up 35% YoY) in FY25 and US$7.1bn in the medium term.

Also, Vedanta had earlier said that it plans to deleverage debt by $3 bn over 3 years and that its promoter entity - Vedanta Resources - does not foresee a rollover of its debt.

Vedanta demerger includes the split of Vedanta into six listed entities. After the exercise, Anil Agarwal will have six independent verticals - Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, Vedanta Base Metals and Vedanta Limited - will be created. 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 as well as the electronics business will remain with Vedanta Limited.

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