Metal giant, Vedanta Ltd has announced the cancellation of its record date for its upcoming fourth interim dividend for FY25. That being said, Vedanta is not going to pay any dividends anytime soon. On Friday, October 11, Vedanta stock ended at Rs 497.40 apiece, up by 1.04% on BSE. The company's market cap is around Rs 1,94,502.70 crore.
Vedanta stock price is nearing its 52-week high of Rs 523.60 apiece, while it has more than doubled from its 52-week low of Rs 211.25 apiece on BSE. The stock's price-to-equity ratio is at 26.29x, while the return on equity is stable at 11.29%.
YTD, the top dividend yield stock jumped nearly 29% on BSE.
Vedanta Dividend:
In its regulatory filing, on BSE, after market hours, Vedanta announced that " the Meeting Update filed vide Letter No. VEDL/Sec./SE/24-25/179 dated October 09, 2024, it may also be noted that the record date fixed also stands cancelled."
On October 9th, Vedanta cancelled its board meeting where directors of the company were going to consider the proposal of a fourth interim dividend. This was extended from its initial board meeting on October 8.
For the fourth interim dividend, Vedanta had already fixed October 16, as the record date for determining eligible investors.
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.
BUY Vedanta Stock?
In ICICI Securities' view, Vedanta is a fitting case of all the cylinders firing together. While Al and ZnIndia divisions are likely to grow on cost and volume leadership, respectively, we expect performance improvement for both O&G and Zn-international divisions as well.
Besides, the brokerage's note pointed out that the focus on VAP at both Al and Zn-India is likely to aid in ameliorating performance in the medium term. Over the long term, there are also plans to grow capacity in steel, power and base metal divisions.
Additionally, ICICI Securities note said, "the upcoming demerger is likely to pave a separate sharpened growth path to individual divisions and offer investors an opportunity to invest in growth-oriented pure-play companies. However, the distribution of standalone debt among different divisions (in particular Al) is likely to be closely tracked."
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.
The 1:6 split-up of business is expected to be completed by December-end.
On the valuation, the brokerage's note said, 'We value VEDL on the SoTP methodology. Our TP works out to INR 600/share.... Besides, a dividend yield of 5-6% over the next three years is an additional sweetener. We resume coverage on VEDL with a BUY rating. The key risk to our thesis: 1) Sharp decline in underlying commodity prices; 2) Delay in start/ramp up of coal mining operations in Al division; and 3) Lower than expected volume growth in Zn-India and Zn-International divisions."
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