Leading metals and oil & gas company, Vedanta Limited’s shares have fallen by 31.62% in the past month and are currently trading at 218.10 levels.
A downturn was observed in the shares of the mining major after it declared dividends. The company declared an interim dividend of ₹ 31.50 per share in April 2022.
Moreover, the shares plunged after the company put up its Sterlite copper unit in Tamil Nadu on sale, four years after it witnessed 13 casualties in an alleged police firing. The smelter has remained shut since May 2018, a week after the deadly protests that sought the plant’s closure for alleged pollution. Vedanta Limited has invited Expressions of Interest (EOI) for its Thoothukudi-based smelter, in conjunction with Axis Capital.
In a recent BSE filing, Vedanta said that its alumina production in Q1FY23 at Lanjigarh refinery increased marginally YoY to 4.85 lakh tonnes, up 1% YoY due to scheduled maintenance in April 2022. Further, its mined and metal production grew 14% to 2.52 lakh tonnes.
The company reported an after-tax profit of ₹7,570 crores for the January to March quarter of FY22, up 48.29% from ₹5,105 crores reported in the corresponding quarter, a year ago. Further, it achieved the highest ever EBITDA of ₹ 13,768 crores in Q4FY22. The results for Q1FY23 are awaited.
JP Morgan is bullish on the Anil Agarwal-owned firm. The brokerage sees a multibagger upside of 124.66% upside in Vedanta. It is overweight on the stock with a March 2023 Target Price of ₹ 490 apiece.
The brokerage said that zinc inventories have declined to multi-decade lows and Vedanta remains best positioned to play higher LME zinc prices. It added that the downside risks include a sharp decline in LME aluminium and zinc prices, inter-company loans to the parent/transactions with the parent that are negative to minority shareholders; and further delays in oil PSC extension.
Written By – Simran Bafna
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