Vedanta’s share price continued to make gains for the fifth straight session on Wednesday going up close to 8% to hit a new 52-week high of ₹364.60.
What Happened: The massive surge today comes as CLSA upgraded its rating on the stock from “underperform” to “buy.” The global brokerage firm also raised its price target on Vedanta’s shares by 50% to ₹390, indicating a potential 15% upside from Tuesday’s closing price of ₹338.
CLSA’s said that Vedanta is well-positioned to capitalize on the commodity upswing due to its diversified exposure. The brokerage also commended the company’s initiatives to boost capacity and profitability across various segments through ongoing capital expenditure activities.
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Regarding the debt scenario, CLSA noted a meaningful decline in levels at the parent company but observed an increase for the Indian-listed entity. The analysts added that the company’s leverage trajectory and corporate structure are deemed crucial factors to monitor.
The recent rally in Vedanta’s stock comes amidst a favourable outlook for the company within the ongoing commodity upcycle. Notably, copper prices have soared to a 15-month high, while zinc prices have reached their peak in nearly a year. Reflecting this positive sentiment, shares of Vedanta’s subsidiary, Hindustan Zinc, surged over 16% on Tuesday. In the last 30 days, Vedanta’s share price has gone up over 30%.
Vedanta has outlined plans to reduce net debt by $3 billion at the parent level over the next three years, without incurring any additional debt at the Indian-listed entity. Additionally, the company is in the process of restructuring its business into six separate entities, with completion slated for the current financial year.
Price Action: Vedanta’s share price was up 6.72% to trade at ₹360.70 in early trade on Wednesday.
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