Citi raises Vedanta stock price target to INR500, maintains Buy rating

Published 01/02/2025, 05:44
Citi raises Vedanta stock price target to INR500, maintains Buy rating

Looking ahead, Citi forecasts a dividend of Rs47 per share in FY25, up from Rs43.5 declared so far, and Rs36 per share in FY26. The analysis includes sensitivity to commodity price fluctuations, noting that every $100 per ton change in the London Metal Exchange (LME) prices for zinc-lead would impact EBITDA by 2% and fair value by Rs15 per share. The stock currently offers an attractive dividend yield of 9.86%, significantly higher than its 5-year average of 25%. For deeper insights into Vedanta (NYSE:VEDL)’s valuation metrics and more exclusive financial analysis, visit InvestingPro, which offers over 30 additional premium indicators and ProTips. The stock currently offers an attractive dividend yield of 9.86%, significantly higher than its 5-year average of 25%. For deeper insights into Vedanta’s valuation metrics and more exclusive financial analysis, visit InvestingPro, which offers over 30 additional premium indicators and ProTips.

Looking ahead, Citi forecasts a dividend of Rs47 per share in FY25, up from Rs43.5 declared so far, and Rs36 per share in FY26. The analysis includes sensitivity to commodity price fluctuations, noting that every $100 per ton change in the London Metal Exchange (LME) prices for zinc-lead would impact EBITDA by 2% and fair value by Rs15 per share. The stock currently offers an attractive dividend yield of 9.86%, significantly higher than its 5-year average of 25%. For deeper insights into Vedanta’s valuation metrics and more exclusive financial analysis, visit InvestingPro, which offers over 30 additional premium indicators and ProTips.

Chopra highlighted Vedanta’s strategic moves, including the deleveraging at the holding company level, the resilience in commodity prices, and the potential for medium-term upside in the aluminum market. The analyst also pointed to the anticipated completion of the company’s demerger process, with shareholder and creditor meetings scheduled for February 18.

Looking ahead, Citi forecasts a dividend of Rs47 per share in FY25, up from Rs43.5 declared so far, and Rs36 per share in FY26. The analysis includes sensitivity to commodity price fluctuations, noting that every $100 per ton change in the London Metal Exchange (LME) prices for zinc-lead would impact EBITDA by 2% and fair value by Rs15 per share. Similarly, a $100 per ton change in aluminum LME prices would affect EBITDA by 4% and fair value by Rs30 per share, while a $10 per ton change in crude oil prices would alter EBITDA by 1% and fair value by Rs4 per share.

Vedanta’s stock performance and outlook are closely tied to these commodity price movements, as indicated by the detailed impact assessment provided by the Citi analyst. The company’s focus on deleveraging and the potential benefits from its demerger process are expected to contribute to its financial health and attractiveness to investors.

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