Neutral on Vedanta, target price Rs 520: Motilal Oswal Securities

Motilal Oswal Securities has a neutral call on Vedanta with a target price of Rs 520. The current market price of Vedanta is Rs 439.25. Vedanta Lt, incorporated in 1965, is a Large Cap company with a market cap of Rs 170453.82 crore, operating in Diversified sector.

Vedanta's key products/revenue segments include Aluminium, Copper Cathodes, Oils, Iron Ore, Pig iron, Others, Other Operating Revenue, Power, Metallurgical Coke, Export Incentives, Scrap for the year ending 31-Mar-2024.

Financials

For the quarter ended 30-09-2024, the company has reported a Consolidated Total Income of Rs 38934.00 crore, up 6.09% from last quarter Total Income of Rs 36698.00 crore and down -1.64% from last year same quarter Total Income of Rs 39585.00 crore. The company has reported net profit after tax of Rs 5603.00 crore in latest quarter.

Investment Rationale
Vedanta's 2QFY25 performance came largely in line across segments. The capex plans are progressing well, which would lead to further cost savings. The management targets to maintain strong growth in earnings, led by the upcoming capacity, which will produce higher VAP products. VEDL remains firm on its deleveraging plans, and higher cash flows going forward will support its expansion plan along with deleverage. The stock currently trades at 5x FY27E EV/EBITDA. Motilal Oswal Financial Services largely maintains its estimates and reiterate our Neutral rating on the stock with a revised SoTP-based target price of Rs 520.

Promoter/FII Holdings
Promoters held 56.38 per cent stake in the company as of 30-Sep-2024, while FIIs owned 11.45 per cent, DIIs 16.29 per cent.