Billionaire Anil Agarwal-led Vedanta Limited, in an exchange filing on Tuesday, said that its board has approved the Third Interim Dividend of ₹ 17.50 per equity share for the current financial year. This is 1750 per cent of the face value of ₹ 1 per share, amounting to ₹ 6,505 crores. The record date for the same has been fixed as Wednesday, November 30, 2022.
Earlier, the company announced a second interim dividend of ₹ 19.50 per share (1950 per cent of its face value) on July 19, 2022. On April 06, 2022, it announced its first interim dividend of ₹ 31.50 per share (3150 per cent of its face value). So far, the company has already paid a dividend of ₹ 51 this year.
The third interim dividend takes the cumulative dividend to ₹ 68.5 per share (₹ 51 + ₹ 17.50), which is 21.67% of its current share price. Vedanta’s shares were trading at ₹ 316.00 apiece at 11:41 AM on Friday. The mining giant has a market capitalization of ₹ 1,15,312 crores and a high dividend yield of 26.21 per cent.
Vedanta Ltd is an arm of Vedanta Resources Ltd, which is one of the world’s leading oil and gas and metals firms with operations in oil and gas, zinc, lead, silver, copper, iron ore, steel, and aluminium and power across India, South Africa and Namibia.
Moody’s Investors Service had stated earlier that a large dividend from its cash-rich India operating arm has boosted Vedanta Resources Ltd’s efforts to refinance debt.
Q2 Result
The metals to oil conglomerate reported a 53 percent year-on-year (YoY) decline in consolidated profit after tax (PAT) at ₹ 2,690 crores in the July-September quarter of 2022 (Q2FY23) as compared to ₹ 5,812 crores in July-September 2021 (Q2FY22), due to weaker commodity prices and higher fuel costs.
Its earnings before interest, taxes, depreciation and amortization (EBITDA) declined 24 percent YoY to ₹ 8,038 crores in Q2FY23 as against ₹ 10,582 crores in Q2FY22. The impact of weaker commodity prices was particularly severe for its aluminium business due to a sharp decline in prices. Further, its oil and gas division suffered due to the windfall tax and lower crude prices.
Targets
Citigroup has maintained a sell rating on Vedanta with a target price of ₹ 235. This implies a downside of 25.63 percent as compared to its current share price. While the brokerage considered the dividend yield to be attractive, it said, “Our outlook for aluminium and zinc is fairly muted for the next few months.”
Motilal Oswal Financial Services reiterated a “neutral” rating on the company’s shares at an unchanged target price of ₹ 255. This translates to a downside of 19.30 percent as compared to its current share price. The brokerage has a bearish outlook on metal prices.
Written by Simran Bafna
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