Multibagger Vedanta share price rises 7%: Should you buy, sell or hold the stock?
- Stock Market Today: Multibagger stock Vedanta gained up to 7 per cent during intraday trade on Friday. The stock has been up 15 per cent since November lows and has gained 101 per cent in the last one year, giving multibagger returns to investors. Should you buy, sell or hold?
Stock Market Today: Vedanta's share price gained up to 7 per cent during intraday trade on Friday. The stock has been up 15 per cent since November lows. While the share price gains are being led by rising base metal prices, the company is also progressing towards a demerger that can unlock value for shareholders. Should you buy, sell or hold the stock?
Multibagger returns
Vedanta's share price opened at ₹474.85 on the BSE on Friday, slightly higher than the previous close of ₹472.20. The Vedanta share price thereafter gained further to highs of ₹505.45, marking gains of almost 7 per cent. The Vedanta share price, which has gained almost 15 per cent since November lows, has risen 101 per cent in a year, giving multibagger returns to investors.
Favourable base metal price and profitability oulook
The aluminium prices on the London Metal Exchange (LME), which were at $2,150 a tonne levels in July-August, have risen to more than $2,600 a tonne levels now. The Zinc prices also are up from close to $2,500 a tonne levels to more than $3,100 a tonne levels now. Other base metal prices, too, remain supportive.
On the other hand, raw material prices have softened, which favours the profitability outlook for base metal companies like Vedanta Ltd.
According to analysts at Antique Stock Broking, the demand scenario for non-ferrous metals is expected to recover in CY25. Lower costs, such as those of crude derivatives, have softened, and lower e-auction premiums translate to lower thermal coal prices, which will aid Indian non-ferrous companies.
Demerger to help value unlocking
Vedanta Ltd plans demerger to create six independent "pure play" entities, aiming to unlock value, attract investments, and enhance sector-specific strengths. The company is in the final stage of demerger with shareholder and creditor meetings scheduled in the coming months and analysts expect NCLT approval by March 2025
The demerger is positioned to drive long-term growth. Vedanta’s ₹1.8 trn market cap could potentially reach ₹3 trn after demerger, said analysts at Equirus Wealth. Each entity will benefit from focused strategies, capital allocation, and management autonomy, moving from centralised to independent operations, added Equirus Wealth, who feels that investors can reallocate based on individual commodity outlooks, likely prompting a re-rating.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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