5 New Shares On 1 Soon: At Low PE, Vedanta Ltd Stock Gives All-Time 11,936% Returns, Q4 Ahead; BUY Time?

Vedanta Ltd's share price will be in focus on April 29th and April 30th due to its Q4 results for FY25. Vedanta witnessed marginal gains on a weekly basis, while the stock is down by a single-digit percentage on a YTD basis. However, in the longest run, Vedanta is a mega multi-bagger with gains of a whopping 11,936%. Another key positive factor of Vedanta is that it is a low PE stock but has the highest dividend yield. In Q4 earnings, developments related to its demerger of business will be keenly watched.

Vedanta Q4 Results:

The Anil Agarwal-backed metal giant will announce its Q4 results on April 30th. Any dividend announcement will be in focus.

"We forecast a 3% QoQ decrease in EBITDA (+23% yoy) due to higher costs in the aluminium segment and mixed trends in commodity prices," said, Kotak Institutional Equities in its note.

Further, analysts at Kotak in the note said, "We forecast (1) the aluminium EBITDA to decrease 5% QoQ (+44% yoy), primarily due to higher input costs, (2) the oil and gas division to witness EBITDA decline of 3.2% qoq on lower volumes and (3) the Zinc India division to be stable qoq (+25% yoy), with higher volumes offset by lower zinc prices."

Vedanta New Update:

On April 28th, Vedanta announced that its subsidiary, Vedanta Power-backed Talwandi Sabo Power Limited (TSPL) has enabled the establishment of Punjab's biggest torrefied bio-pellets manufacturing facility, near its 1,980 MW plant in Mansa. Driven by TSPL's demand for biofuel, the plant has been set up by its strategic business partners to manufacture and ensure steady supply of torrefied bio-pellets.

As per the main statement, Punjab generates nearly 15-20 million tons of crop stubble (parali) annually. Much of this is traditionally burned in the fields, contributing to severe seasonal air pollution across North India. With this use of biomass in its fuel mix, TSPL will decrease its carbon footprint in two ways. First, TSPL had procured over 8 lakh tons of agricultural stubble in the paddy season, for conversion into approximately 6.4 lakh tons of torrefied bio-pellets. Secondly, the company will reduce 5% use of coal daily by replacing a portion of coal with this carbonneutral alternative. These two pathways together, will potentially avert nearly 2.6 million tons of CO₂ emissions.

Vedanta Demerger:

Amidst the prices of aluminium, zinc and copper erasing their gains of 2024, billionaire Anil Agarwal believes that a simpler structure for the sprawling group and growing demand for critical minerals will add to the allure of his companies even as the specter of a global recession looms, as per Bloomberg report earlier.

The demerger of Vedanta includes 5 new listings of its business alongside its own. Vedanta will be split into metals, power, aluminium, and oil and gas businesses to unlock potential value. After the exercise, six independent verticals - Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, Vedanta Base Metals and Vedanta Limited - will be created.

Under the demerger agreement, every eligible shareholder of Vedanta will get one share each in the five newly listed companies, against their 1 existing share in Vedanta.

Vedanta Share Price:

After market hours of April 28th, Vedanta stock closed at Rs 416.45 apiece, up by nearly 1% on NSE, with market cap of Rs 1,62,848.11 crore. The stock's PE ratio is low at 9.79x, while return on equity is healthy at 22.07%, data from BSE. The stock's 52-week high and low is at Rs 526.95 and Rs 363.00 apiece respectively.

Notably, in 1-year span, Vedanta shares zoomed by nearly 3%, but in long term, the stock advanced by whopping 365% in 5 years. Vedanta's all-time gains is a whopping 11,936.13% on NSE. The stock was once merely at Rs 3.46 on NSE on January 1, 1999.

The consensus recommendation from 15 analysts for Vedanta Ltd. is BUY, as per Trendlyne data. The company's EPS is expected to grow by 211.1% in FY25. The average 1-year target price is at Rs 524.87, signalling potential over 26% upside ahead.

Meanwhile, currently, brokerages like ICICI Securities has suggested BUY with highest target of Rs 605, followed by Emkay Global and IIFL Securities with target price of Rs 575 and Rs 570 on Vedanta. However, brokerage Geojit recommended HOLD Vedanta stock for a target of Rs 496. Lastly, Kotak Institutional Equities has suggested REDUCE on Vedanta stock for a target price of Rs 465.

Disclaimer: The write-up is just for information purposes, and is not a recommendation to buy, sell or hold. We have not done fundamental or technical analysis and have no opinion on article mentioned. Neither, the author nor Greynium Information Technologies should be held liable for any losses. Please consult a professional advisor.