Metal giant, Vedanta Ltd which is the highest dividend yield stock in its sector and large-cap basket, is finally coming up with its fourth interim dividend. The upcoming dividend reward will be announced in a board meeting scheduled on December 16, 2024. Following this, Vedanta stock shot up to hit a new 52-week high on Wednesday. As of now, a total of 7 brokerages have recommended BUY on Vedanta with the highest target price set at Rs 663.
Vedanta Ltd Dividend:
As per the regulatory filing, Vedanta said that the meeting of the Board of Directors of the Company (the "Board") is proposed to be scheduled on Monday, December 16, 2024, to consider and approve the Fourth Interim Dividend on equity shares, if any, for the Financial Year 2024-25.
For the upcoming dividend, Vedanta has fixed Tuesday, December 24 as the record date for the purpose of determining the entitlement of the equity shareholders for the said dividend.
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 Ltd Share Price:
At the time of writing, Vedanta stock traded marginally up by 0.5% to Rs 516.50 apiece on BSE. The market cap stood at Rs 2,02,108.41 crore. The stock pulled back a little from its fresh 52-week high of Rs 525.15 apiece which was recorded on December 11. The stock's price-to-equity ratio is at 11.26x, while the return on equity is about 23.80%.
YTD, Vedanta stock jumped by nearly 34%.
BUY/SELL Vedanta Stock:
As per brokerage Equirus Wealth, Vedanta is set for growth through vertical integration & capacity expansion in aluminium to drive volume growth and EBITDA. It focuses on scaling capacities and maintaining cost leadership in zinc. While robust production goals, enhanced recovery, and a favourable contract mix boost O&G's EBITDA. Planned cash flows support dividend payouts, parent debt reduction, and balance sheet deleveraging. The strategic demerger into six sector-focused entities further aims to unlock value and drive sustainable growth across its diversified portfolio.
It said, "We expect Vedanta's Revenue/EBITDA/PAT to grow at a 8.4%/16%/76.5% CAGR over FY24-FY27E."
Further, Equirus note added, "We Initiate coverage on the stock with BUY rating and Mar'26 TP of Rs. 560 set at 5.5x Mar'27E Consolidated EBITDA ex-Hindustan Zinc (HZ) & 7x Mar'27E HZ EBITDA."
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.
Equirus note said, "Each entity will benefit from focused strategies, capital allocation, and management autonomy, moving from centralized to independent operations. Investors can reallocate based on individual commodity outlooks, likely prompting a re-rating. With NCLT approval expected by March 2025, the demerger is positioned to drive long-term growth. Vedanta's Rs 1.8 trn market cap could potentially reach to Rs 3 trn; post-demerger."
Additionally, Equirus highlighted that Vedanta Ltd. prioritizes dividends to aid parent VRL in reducing its USD 5.5 bn debt by USD 3 bn in three years. With a 1.49x net debt-to-EBITDA ratio as of September 2024, Vedanta leads the industry in liquidity. Over three years, it expects cumulative of $20 bn EBITDA and $7- 8 bn cash flow, supporting capex, dividends, and gradual deleveraging for Vedanta.
After its Q2FY25 results, six brokerages including global, have recommended BUY on Vedanta.
Global brokerage CLSA has suggested OUTPERFORM on Vedanta stock with target price of Rs 520, which Vedanta has surpassed on December 11. The next big target is of Rs 545 and Rs 559 set by Systematix Investment and IIFL with BUY recommendation.
Notably, with BUY rating, both ICICI Securities and Emkay have set Rs 600 target on Vedanta. The highest target is set by Nuvama at Rs 663 with BUY recommendation
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