Vedanta Share Price Target 2025: Demerger Approaches – Buy, Sell or Hold? Brokerage View

Anil Agarwal-led Vedanta Limited has announced the revision of its demerger scheme with which the new entity will not have the base metal company of the parent as it will maintain the status quo. With this update, the brokerage firms are reassessing their rating on the stock. So amid these developments, should you buy, sell, or hold your Vedanta stock? Here’s what Emkay Global has to say. 

Vedanta Revised Demerger Scheme

Vedanta Limited has revised its demerger scheme, opting to retain its Base Metals company within the parent entity instead of creating a separate business. This decision stems from ongoing efforts to restart the Tuticorin copper smelter and feedback from lenders. The company believes this change will unlock greater value and ensure better debt allocation across its units.  

The move is expected to streamline the lender approval process, as retaining the smelter would ease operational and financial complexities. Vedanta has committed to completing the demerger process by January 2025, with a share entitlement ratio of 1:1 for all the new companies formed under the scheme.  

Brokerage Recommendation: Buy, Sell, or Hold?  

Emkay Global has maintained a ‘Buy’ rating for Vedanta’s stock following the revised demerger plan. The brokerage predicts a potential upside of 26.11 per cent, maintaining a target price of Rs 600. At present, Vedanta’s shares are trading at Rs 461.40, making the stock an attractive proposition for investors eyeing medium-term growth.  

Emkay highlights Vedanta Limited, Vedanta Aluminium, and Vedanta Power as key components of a balanced portfolio, indicating confidence in the firm’s ability to perform through market cycles.  

Financial Performance Highlights  

Vedanta posted a consolidated net profit of Rs 4,352 crore for the September quarter (Q2), a significant turnaround from a loss of Rs 1,783 crore in the same period last year. The previous year’s loss was attributed to a one-time tax regime change.  

Revenue, however, dipped 3.6 per cent on a year-on-year basis to Rs 37,171 crore in Q2, reflecting a subdued operating environment. Nonetheless, the one-time gain and improved operational efficiencies have bolstered investor confidence ahead of the demerger.  

As the demerger process nears completion, the focus will remain on the firm’s ability to balance debt effectively and drive sustained growth across its business units.

Disclaimer

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