Vedanta shares are in focus today; here's why
The recent rise in alumina cost due to elevated bauxite and alumina prices are expected to ease from Q1FY26, Vedanta's earnings call suggested.
- Feb 19, 2025,
- Updated Feb 19, 2025 8:11 AM IST
Shares of Vedanta Ltd are in focus in Wednesday's trade after the metals & mining major reportedly received 83 per cent creditor approval for its proposed demerger. This would pave way for splitting of its businesses into five separate entities, as per the proposed restructuring plan. The company required support from at least 75 per cent of creditors by debt value for the proposal to move forward. The procedural aspects are expected to be concluded in 2-3 months.
Shareholders of Vedanta would receive one equity share each of the five newly listed companies for every one share of Vedanta they held. The approval from stock exchanges had already been received. The meeting yesterday sought approval from shareholders and creditors for the demerger. Analysts are expecting the demerger process to be concluded by the end of Q1FY26. The meeting with equity shareholders was scheduled for 10 am yesterday. Secured creditors meeting took place at 11.45 am and unsecured creditors' at 1 pm.
Emkay Global, earlier this month, said its SOTP valuation with full value unlocking from the demerger implies a 50 per cent upside for Vedanta. For now, it has a target of Rs 575 on the stock.
Vedanta's parent VRL's debt stands at $5.2 billion, at effective interest cost of 1er cent, with the company targeting to bring it down to 9.8 per cent in 2025 by refinancing the $1 billion debt. The repayment and interest commitment would be at $1.4 billion in FY26.
Vedanta expects the Train 2 of alumina refinery expansion of 1.5mtpa to be commissioned in Q4FY25 and the combined capacity expected to fulfill 70 per cent of the alumina requirement in FY26. The recent rise in alumina cost due to elevated bauxite and alumina prices are expected to ease from Q1FY26, Vedanta's earnings call suggested.
VRL’s debt has been managed at average interest rate of less than 10 per cent in H2FY26 against 13.3 per cent earlier, with the debt maturity extending to FY34. The demerger of the business likely by July 2025, it suggested.
"We remain positive amid triggers such as a high dividend (Rs 35 in FY26), cost reduction and volume growth in aluminium and zinc from FY26, and demerger of businesses; retain ‘BUY’ with a target of Rs 663," Nuvama said.
Analysts said Vedanta's December quarter performance was largely in line across segments, adding that capex plans were progressing well and could soon lead to further cost savings.
The company management is targeting to maintain strong growth in earnings, led by the upcoming capacity that would produce higher VAP products, MOFSL said.
Shares of Vedanta Ltd are in focus in Wednesday's trade after the metals & mining major reportedly received 83 per cent creditor approval for its proposed demerger. This would pave way for splitting of its businesses into five separate entities, as per the proposed restructuring plan. The company required support from at least 75 per cent of creditors by debt value for the proposal to move forward. The procedural aspects are expected to be concluded in 2-3 months.
Shareholders of Vedanta would receive one equity share each of the five newly listed companies for every one share of Vedanta they held. The approval from stock exchanges had already been received. The meeting yesterday sought approval from shareholders and creditors for the demerger. Analysts are expecting the demerger process to be concluded by the end of Q1FY26. The meeting with equity shareholders was scheduled for 10 am yesterday. Secured creditors meeting took place at 11.45 am and unsecured creditors' at 1 pm.
Emkay Global, earlier this month, said its SOTP valuation with full value unlocking from the demerger implies a 50 per cent upside for Vedanta. For now, it has a target of Rs 575 on the stock.
Vedanta's parent VRL's debt stands at $5.2 billion, at effective interest cost of 1er cent, with the company targeting to bring it down to 9.8 per cent in 2025 by refinancing the $1 billion debt. The repayment and interest commitment would be at $1.4 billion in FY26.
Vedanta expects the Train 2 of alumina refinery expansion of 1.5mtpa to be commissioned in Q4FY25 and the combined capacity expected to fulfill 70 per cent of the alumina requirement in FY26. The recent rise in alumina cost due to elevated bauxite and alumina prices are expected to ease from Q1FY26, Vedanta's earnings call suggested.
VRL’s debt has been managed at average interest rate of less than 10 per cent in H2FY26 against 13.3 per cent earlier, with the debt maturity extending to FY34. The demerger of the business likely by July 2025, it suggested.
"We remain positive amid triggers such as a high dividend (Rs 35 in FY26), cost reduction and volume growth in aluminium and zinc from FY26, and demerger of businesses; retain ‘BUY’ with a target of Rs 663," Nuvama said.
Analysts said Vedanta's December quarter performance was largely in line across segments, adding that capex plans were progressing well and could soon lead to further cost savings.
The company management is targeting to maintain strong growth in earnings, led by the upcoming capacity that would produce higher VAP products, MOFSL said.