Vedanta dividend yield makes stock ‘attractive’, brokerages up

Apart from strength in zinc prices, aluminum prices have also moved up in the recent past. Benefit of cost savings in aluminum through 3mtpa alumina expansion in FY24 and utilization of captive coal will reduce CoP structurally. In addition, 16% Dividend The yield makes the stock attractive; ‘Buy’ recommendation on Vedanta shares with a target price of Rs. 428 (from 374),” said brokerage Edelweiss.

While global macro environment is likely to weigh on any significant correction in LME prices and opening up of China is expected to support demand and prices, but looming recession in Europe is a concern, according to another brokerage Motilal Oswal. Is increasing

“The reduction in metal prices will be partially offset by reduction in input costs such as thermal coal. We reiterate our neutral rating on VEDL as we believe the current environment is fully priced in. We reduce our SOTP-based TP 330. While we lower our aluminum price estimates modestly, savings from captive/linkage coal should help offset the downside,” the note said.

Vedanta Recently started its operations at Jamkhani coal mine and is set to open more mines, Vedanta is on its way to achieve 100% self-sufficiency in thermal coal. According to analysts, this will be a structural move towards reducing the COP. Vedanta is hopeful that the deal with Hindustan Zinc will fructify as it is a value addition for both the entities. The funds received by the company will be deployed based on its capital allocation policy. This can be used for payment of dividend, capex and other purposes, the brokerage said.

Vedanta is a global natural resources company with operations in oil and gas, zinc, lead, silver, copper, iron ore, steel and aluminum, and power. The stock is down about 0.4% over the one-year period.

The views and recommendations given above are those of individual analysts or broking companies and not of Mint.