Metal giant, Vedanta Ltd will be in focus on Thursday, October 9, 2024, after the company announced two major updates. Firstly, the much-awaited dividend proposal meeting has been cancelled, and secondly, the Anil Agarwal-backed company received customs penalties. The consensus recommendation in Vedanta is a mixed bag between BUY/HOLD/SELL for the stock.
Vedanta Stock Price:
Ahead of the board meeting, Vedanta's stock price traded volatile on Octber 9, 2024. The stock price ended at Rs 496.30 apiece, down by 0.20% on BSE. The company's market cap is at Rs 1,94,072.56 crore.
Vedanta corrected sharply on a weekly basis, and from its 52-week high of Rs 523.60 apiece. The stock's week low is at Rs 211.25 apiece. In 5 trading sessions, Vedanta dipped by 4.2%.
YTD, Vedanta stock is up by 29% on BSE.
Vedanta Dividend:
Vedanta's board of directors were supposed to meet on October 8, initially, to consider and approve fourth interim dividend for FY25. However, the meeting was postponed to October 9, and now has been cancelled.
As per the regulatory filing, Vedanta said, "We wish to inform you that due to unforeseen circumstances, we withdraw the Notice of Board Meeting proposed to be held on October 9, 2024, and accordingly the Board meeting hereby stands cancelled."
Vedanta did not reveal the details of the 'unforeseen circumstances'.
However, the company has already fixed October 16, as the record date for determining eligible investors for the fourth interim dividend. It will be keenly watched when Vedanta will reveal the details of the dividend payout.
Earlier, in 2024, Vedanta paid a 400% second interim dividend worth Rs 4 per share, while the first interim dividend was 1,100% valued at Rs 11 per share. The third interim dividend was a whopping 2,000% worth Rs 20 per share and for this, Vedanta turned ex-dividend on September 10, 2024.
In FY24, Vedanta delivered a 2950% dividend worth Rs 29.5 per share.
Vedanta Customs Penalties:
In the late hours of Wednesday, Vedanta said, "The Company has received an Order from Office of the Commissioner of Customs, Tuticorin confirming levy of Penalty of Rs. 92,03,85,745 and Fine of Rs. 10,00,00,000 along with demand of Customs Duty and applicable Interest. The demand confirmed is in relation to the import condition which was applicable for a limited period, on imports against advance authorization. "
Vedanta said, "The Company believes that there is a strong case of merit and law, more specifically due to the recent judicial pronouncements. The next course of action shall be decided in due course."
"The Company does not reasonably expect the said Order to have any material financial impact, operations or other activities of the Company," it said lastly.
Vedanta BUY/SELL/HOLD:
1. SELL Rating: Broker Kotak Institutional Equities has recommended SELL on Vedanta for a fair value of Rs 390 apiece.
2. HOLD Rating: Broker Antique Stock Broking has suggested HOLD on Vedanta for target price of Rs 457.
3. BUY Rating: ICICI Securities in its latest report revealed that they have resumed coverage on Vedanta (VEDL) with a BUY rating. The brokerage sees VEDL weaving its growth story around two 'Vs' and one 'C' viz. volume, value, and cost reduction-across segments, especially in its aluminium (Al) and Zinc-India (Zn-India) divisions. The target price on Vedanta is of Rs 600, highest so far.
Vedanta Split:
Among much-awaited developments in Vedanta is its demerger into six businesses, aka a 1:6 ratio. Vedanta has received approval to demerger 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.
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