Vedanta shares jump 6% to hit 52-week high post Q4

Billionaire Anil Agarwal-led Vedanta shares rallied nearly 6% to hit a fresh 52-week high in intraday trade, a day after the mining company released its March quarter earnings, which was broadly in line with Street expectations. Post Q4 results, brokerages raised target price on Vedanta, pushing the share price higher.

Riding high on robust Q4, shares of Vedanta rose as much as 5.8% to touch a new record high of ₹402.95 on the BSE. The market capitalisation climbed to ₹1.47 lakh crore with more than 12 lakh shares changing hands over the counter.

The share price of the mining heavyweight has nearly doubled from its 52-week low of ₹207.85 touched on September 28, 2023. The counter gained 43% in the last one year; 83% in six months; and 54% year-to-date (YTD). In the last one month, the largecap stock soared 46%, while it added over 2% in a week.

For the fourth quarter ended March 31, 2024, Vedanta reported a 27.2% decline in consolidated net profit to ₹1,369 crore as compared to ₹1,881 crore in the year-ago period. Sequentially, the profit was down 21% from ₹2,868 crore in Q3 FY23.

The consolidated revenue in the January-March period was ₹34,937 crore, flat quarter-on-quarter but down 6% year-on-year.

The EBITDA of the company stood at ₹8,969 crore in Q4 FY24, which was down 4% as against ₹9,362 crore in Q4 FY23. Sequentially, it rose by 3% from ₹8,677 crore in the December quarter of FY24. The margin improved to 30% from 29% in Q3 FY24 and Q4 FY24.

As of March 31, 2024, the net debt stood at ₹56,338 crore, down 10% QoQ, while net debt to EBITDA improved to 1.5x svers 1.7x in Dec '23. The liquidity of the company improved by 21% QoQ with strong cash and cash equivalent of ₹15,421 crore. It generated robust Free cash flow (pre capex) of ₹9,948 crore, up 131% QoQ.

Post Q4, Nuvama Institutional Equities reiterated ‘BUY rating on the stock with a revised target price of ₹542 from ₹394 earlier. “"We are jacking up Vedanta's FY25/26 EBITDA estimates by 18 per cent/23 per cent factoring in higher commodity prices and lower CoP in aluminium. We believe the company’s debt peaked out in FY24,” it says in a note.

Meanwhile, Motilal Oswal retained ‘Neutral’ rating on Vedanta with a revised target price of ₹360, down 6% from Thursday’s closing price. “The performance in Q4 FY24 came largely as anticipated across segments. Extending the maturity of bonds at HoldCo. by three years offers the company adequate liquidity comfort in the near term. The Capex plans are progressing well which would lead to further cost savings,” it says in its report.

The brokerage says that the stock currently trades at 6.9x FY26E EV/EBITDA. “We marginally increase our EBITDA estimates by 4% in FY26 to incorporate the improving outlook.”

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