8.55% Dividend Yield: Largecap Metal Stock Vedanta Snaps 7-Day Gaining Streak, Still Remains Multibagger; BUY?

The shares of Vedanta Ltd, the Anil Agarwal-led mining and metals conglomerate, declined over 2% on Monday, December 9, snapping a seven-day winning streak. Despite this dip, the stock continues to trade near its 52-week high, touching an intraday high of Rs 501 on Monday. The 52-week high for Vedanta stands at Rs 523.65.

Performance in 2024

Vedanta shares have been on a stellar run this year, delivering multibagger returns of 100% over the past year. In 2024 alone, the stock has surged over 92%, marking it as one of its best-performing years since 2016, when it gained an impressive 139%. This year also marks a recovery for Vedanta following negative returns in 2022 and 2023. The stock's current rally echoes its performance in 2021 when it rose by 110%.

The December rally alone has seen the stock rise by 8%, a sharp rebound following consecutive monthly declines in October and November.

Major Investment

At the Rising Rajasthan summit on Monday, Vedanta Chairman Anil Agarwal announced plans to invest Rs 1 lakh crore in Rajasthan over the coming years. This massive investment is expected to focus on expanding operations and driving economic growth in the state.

Demerger Plans in Progress

Vedanta is also undergoing a transformation through its planned demerger into six separate entities. The company aims to complete this restructuring soon, which is anticipated to unlock shareholder value and streamline its operations across sectors such as metals, power, and oil & gas.

Brokerage Views

The stock has garnered attention from analysts, with a majority maintaining a bullish outlook. Out of 15 analysts covering Vedanta, nine have a "buy" rating, five recommend "hold," and only one advises "sell."

Brokerage firm Equirus has reiterated its "buy" rating on Vedanta with a target price of Rs 560, citing attractive valuations. Equirus projects Vedanta's revenue, EBITDA, and net profit to grow at a compounded annual growth rate (CAGR) of 8.4%, 16%, and an astounding 76.5%, respectively.

Nuvama holds the most optimistic target price for Vedanta at Rs 663, while Kotak Securities, the sole firm with a "sell" recommendation, has set the lowest target of Rs 430 per share. Overall, analysts forecast a consensus upside of 7.2% for Vedanta over the next 12 months.

As of 2:30 pm on Monday, Vedanta shares were trading at Rs 494.90 on the National Stock Exchange (NSE), reflecting cuts of over 1%. The stock remains a favourite among investors, with its solid fundamentals and ongoing restructuring efforts driving positive sentiment. Vedanta's strong performance in 2024, coupled with its ambitious investment plans and strategic demerger, positions it well for future growth.

*Some inputs from CNBC-TV18*