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Shares of Anil Agarwal-led commodity major Vedanta rose 4 per cent on Friday after better-than-expected financial performance during the March quarter prompted analysts to up price targets for the stock. After hitting an intra-day high of Rs 403, the stock closed at Rs 397, the highest level in two years.
Volume growth and cost efficiencies in the aluminium business saw Vedanta post operating profit (Ebitda) of nearly Rs 9,000 crore for the March 2024 quarter thanks to margin improvement.
The company also reduced the debt by Rs 6,155 crore during the quarter, which improved its net debt-to-Ebitda ratio to 1.5x from 1.7x. On a full-year consolidated basis, the company has clocked revenue of Rs 1.42 trillion and Ebitda of Rs 36,455 crore.
Nuvama and Citi have increased their price targets for the stock by nearly 40 per cent to Rs 542 and Rs 425 respectively, while CLSA has hiked its price target to Rs 430 from Rs 390 earlier. “We are hiking Vedanta’s FY25E/26E Ebitda by 18 per cent/23 per cent, factoring in higher commodity prices and lower cost of production in aluminium. We believe the company’s debt peaked out in FY24,” Nuvama said in its note.
A rally in global metal prices and improved economic outlook for China has seen shares of Vedanta gain 53 per cent so far this year. Despite that, the stock is still trading at a 12-month forward price-to-earnings multiple of less than 12x. In September 2023, Vedanta had announced the demerging of metals, power, aluminium, and oil and gas businesses into separate entities to unlock potential value. The demerger, which is expected to be completed by the end of FY24, can yield Vedanta higher-than-the-current sum-of-the-parts value, believes Nuvama.
Motilal Oswal announces 3:1 bonus
Motilal Oswal Financial Services (MOFSL) on Friday reported a net profit of Rs 723 crore for the quarter ended March 2024, up nearly 10 per cent quarter-on-quarter from Rs 660 crore while its operating income jumped 20 per cent to Rs 2,141 crore sequentially.
Further, the company’s board has also approved a bonus issuance of three shares for every one share. At the end of FY24, the company had cash and cash equivalents of Rs 5,286 crore.
The company’s asset and wealth management business also recorded a net profit of Rs 210 crore in the fourth quarter, up 79 per cent year-on-year while its capital market business delivered the highest ever quarterly profit after tax of Rs 251 crore.
“Huge investments in our wealth management business, strengthening of leadership across regions and functions combined with the wealth effect underway should all come together to make this business our next growth engine,” said Motilal Oswal, managing director and chief executive officer, MOFSL.
Shares of MOFSL ended at Rs 2,600, up over 5.5 per cent from the previous day’s close.
Edelweiss MF launches Nifty Alpha Low Volatility 30 Index Fund
Edelweiss Mutual Fund on Friday announced the launch of Nifty Alpha Low Volatility 30 Index Fund, a multi-factor index fund comprising 30 stocks that have recently outperformed the broader market and are relatively less volatile. The fund house said that the index has outperformed the Nifty 100 TRI by over 5 per cent in the last 10 years. The new fund offering (NFO) closes for subscription on April 26, 2024. MD and CEO Radhika Gupta said the fund is suitable for investors "seeking to invest in large-cap oriented strategies which can outperform the broader market".
HDFC MF launches HDFC Manufacturing Fund
HDFC Mutual Fund on Friday launched HDFC Manufacturing Fund, which will primarily invest in shares of companies engaged in manufacturing activities. According to the fund house, the scheme will look to capitalise on the manufacturing sector tailwinds like the "growing consumption, investments, and exports, coupled with changing geopolitical dynamics and the government's push for self-reliance through reforms and incentives". The scheme will be market capitalization agnostic and will invest at least 80 per cent of the corpus in stocks falling under the manufacturing theme.
Front-running: Sebi bars 8 individuals
The Securities and Exchange Board of India (Sebi) on Friday barred eight individuals from the securities market and directed them to disgorge an unlawful gain of Rs 1.3 crore jointly in an alleged front-running matter. These players include employees of several stock brokers and family members associated with them. In the order, the Sebi has refrained from naming the stock brokers where these individuals were employed. These players include employees of several stock brokers and family members associated with them. In the order, the Sebi has refrained from naming the stock brokers where these individuals were employed. A portfolio management service firm had empanelled 13 stock brokers to execute their trades. These individuals, who had access to the information of trades by the PMS, executed trades in different accounts to generate unlawful gains.
