Vedanta shares fell 25% from 52-week high in 2023; here are the targets for next year

Shares of Vedanta Ltd have fallen 25% from their 52-week high hit in January 2023. Vedanta stock, which hit a yearly high of Rs 340.75 on January 20, was trading at Rs 255.60 in the last trading session of this year. In the current session, the metal stock opened lower at Rs 255.65 against the previous close of Rs 257.50 on BSE. In the last one month, the Vedanta stock has gained 9.60%. Market cap of the firm declined to Rs 95,085 crore.

In terms of technicals, the relative strength index (RSI) of Vedanta stands at 58.4, signaling the stock is trading neither in the overbought territory nor in the oversold zone. Vedanta shares stand lower than the 5 day , 10 day , 200 day but higher than the 20 day, 30 day, 50 day, 100 day and 150 day moving averages.   

Vedanta shares fell to a 52-week low of Rs 207.85 on September 28, 2023. Vedanta shares have lost 19.08% this year and fallen 16.70% in a year. 

Gaurav Bissa, Vice-President, InCred Equities said, "Vedanta has witnessed a sharp bounce after forming double bottom pattern on the weekly charts. The strong rally seen in Nifty Metal index also pushed the prices of Vedanta higher. The stock has witnessed a small bullish triangle pattern breakout, however, it is trading near confluence of 55EMA, 89EMA and 200EMA resistance on the weekly charts suggesting a move towards Rs 300 can be seen once it gives a weekly close above Rs 267 levels."

Shiju Koothupalakkal - Technical Research Analyst, Prabhudas Lilladher said, "The stock has witnessed a decent pullback from Rs 230 level and currently has been in consolidation around the Rs 250-260 zone. It would need a decisive breach above Rs 265 zone to indicate a breakout and anticipate for further fresh upward move. At the same time, a decisive breach below the important 50EMA level of Rs 245 shall weaken the bias to expect for further slide."

Abhijeet from Tips2trades said, "Vedanta is slightly bearish on the daily charts with strong resistance at Rs 264. A daily close below the support of Rs 249 could lead to a target of Rs 230 in the near term."

Foreign brokerage CLSA has reduced its FY24-26 EBITDA estimates for Vedanta by 7-12 per cent for Vedanta on lower margins.

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"The implied blended EV/Ebitda multiple is 4.8 times. Given its large ongoing capex programme, we value capital work in progress at a 50% discount. Given its exposure to multiple commodities, like zinc, aluminium, oil, etc, Vedanta is well placed to benefit from the current upcycle. Walking the talk on capital allocation policy and timely execution of expansion projects is key for re-rating," CLSA said on Vedanta.

Risks for Vedanta, it said, include a slower-than-expected pickup in growth projects, weaker commodity prices and deviation from stated capital allocation policies.    

Vaibhav Kaushik, Research Analyst at GCL Broking said, "Stock has given reverse head and shoulders break out. A fall in dollar index is also helping commodity prices on upward direction. Crude prices are also down. This will help the stock to reach up to Rs 324 in coming quarter."

Vedanta on December 18 approved the second interim dividend of Rs 11 per equity share. The dividend is equivalent to 1100% on face value of Rs 1/- per equity share for the financial year 2023-24, which amounts to Rs 4,089 crore. The record date for the purpose of payment of dividend was fixed as Wednesday, December 27, 2023

Vedanta had earlier in May declared its first interim dividend of Rs 18.50 per share.

Vedanta Ltd is a subsidiary of Vedanta Resources Ltd and has operations in oil and gas, zinc, lead, silver, copper, iron ore, steel, and aluminium and power across India, South Africa and Namibia.

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