Metal giant company, Vedanta Ltd will be in focus this week, as the company will announce its fourth interim dividend for FY25. Vedanta stocks dipped by 0.6% to Rs 497.30 apiece, as the board meeting for dividend proposal was postponed on this day, and pushed on October 9. Also, Vedanta's performance comes after Vedanta reported a record Aluminium production of 1205 kt in 1H, while Alumina production jumps 21% YoY. ICICI Securities is the latest to recommend BUY on Vedanta.
Vedanta Share Price:
Ahead of the interim dividend announcement, Vedanta stock is near its 52-week high of Rs 523.60 apiece, while the stock has more than doubled from its 52-week low of Rs 211.25 apiece.
Vedanta Q2 Production:
In Q2, the company's total aluminium production stood at 609,000 tonnes, up by 3% year-on-year. Meanwhile, the company's subsidiary Zinc India's saleable metal stood at 262,000 tonnes in Q2FY25, up by 8% YoY.
Among other key highlights are that Vedanta posted an all-time high half-yearly Alumina production of 1039 kt (+21% YoY), and Aluminium production of 1,205 kt (+3% YoY) in the first half driven by operational efficiencies. Zinc India posted a new high for mined metal while the production of refined metal increased by 5% YoY to 524 kt in the first half of the year.
Also, Zinc International volumes rise 16% QoQ. Further, its power sales increased 10% YoY in 1H supported by higher generation from thermal plants, and that of ferrochrome production jumped 70% YoY to 53 kt driven by the commissioning of the new furnace.
Vedanta Dividend:
Vedanta's board is meeting on October 8 to consider and approve the Fourth Interim Dividend on equity shares, if any, for the Financial Year 2024-25. 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 Split:
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.
ICICI Securities on Vedanta:
In its latest report, ICICI Securities said, "We resume coverage on Vedanta (VEDL) with a BUY rating. We see VEDL weaving its growth story around two 'Vs' and one 'C' viz. volume, value, and cost reduction-across segments, especially in its aluminium (Al) and Zinc-India (Zn-India) divisions."
The brokerage highlighted key points for Vedanta. These are - 1) Significant volume growth aspirations for all divisions. 2) Al/Zn-India - potentially key earnings growth drivers. 3) Oil & gas (O&G) production is likely to bottom up by FY26E. 4) Growth vectors at VEDL may help pare debt by USD 3bn over the next three years. 5) Dividend yield could sustain at >5% p.a.
On the valuation, ICICI Securities' note said, "Put together, we envisage an EBITDA CAGR of 25% YoY through FY26E and RoE of 40-45% over the next two years. A SoTP-based valuation arrives at a TP of INR 600, implying an EV/EBITDA of 5.7x on FY26E and FY27E blended EBITDA (50% weight each)."
About Vedanta:
Vedanta has put in place a comprehensive framework to be the ESG leader in the natural resources sector, is committed to reducing carbon emissions to net zero by 2050 or sooner and aims to spend $5 billion over the next 10 years to accelerate this transition. Giving back is in the DNA of Vedanta, which is focused on enhancing the lives of local communities.
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.
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