Stock Of The Day: Vedanta Shares Trade In Uncharted Zone As Sentiments Soar | Key Technicals
Vedanta's stock rose as much as 4.9% during the day to a lift high of Rs 525 apiece on the NSE.
Shares of Anil Agarwal owned-Vedanta Ltd. hit a new life high after breaking a key resistance level on Wednesday as sentiments remain upbeat post multiple investment commitments made by the conglomerate.
The group is set to invest Rs 1 lakh crore in Rajasthan over the next two to three years to enhance the production capacity of its companies. Chairman Anil Agarwal said that the group firm Hindustan Zinc Ltd. is producing 1 million tonnes zinc at present, which the company plans to double to 2 million tonnes.
Earlier in the month, Vedanta Aluminium Ltd. said it plans to spend Rs 1,200 crore in the next 25 years for the development of the periphery area around its plants in Odisha.
In another significant boost for the group's ambitions to become a global metals and mining hub, Vedanta is set to invest $2 billion to build copper-processing facilities in Saudi Arabia. The firm will build a new smelter and refinery with a capacity of 4 lakh metric tons per year.
The firm plans to commence operations in the kingdom with a 125-kilotonne-per-year copper rod mill project that will require an investment of about $30 million. Full commercial production is expected to start in 2026.
These investments come as Vedanta aims to generate $4 billion in pre-capex cash flow in the financial year 2025 and continue to deleverage. The focus of management is generating cash through volume and capital optimisation, Executive Director Arun Mishra told NDTV Profit earlier.
Debt Upgrades
The positive sentiment soared not only on the billionaire Agarwal's investment plans but on the improvement in its debt ratings. Multiple ratings agencies upgraded its rating on its long-term bank facilities and debt instruments.
Crisil, earlier this month, upgraded its rating on Vedanta's long-term bank facilities and debt instruments to AA from 'AA-'. The rating upgrade factors the expected "material improvement" in the consolidated operating profitability along with "improved capital structure" with reduction in debt and leverage to below rating thresholds, Crisil said.
In September, ICRA upgraded Vedanta Ltd's long-term credit rating to AA from AA-, citing the company's strengthened credit profile.
Moody's Ratings, in November, upgraded Vedanta Resources Ltd.'s corporate family rating to B2 from B3 after VRL's successful liabilities management exercises.
Stock At Life High
Vedanta's stock rose as much as 4.9% during the day to a lift high of Rs 525 apiece on the NSE. It was trading 3.43% higher at Rs 517.4 apiece, compared to a 0.2% advance in the benchmark Nifty 50 as of 11:00 a.m.
The stock surged past the key resistance of Rs 525—the previous life high formed in September this year—but is yet to close above the mark, to indicate a sustained rally. The counter closed past the immediate resistance of Rs 505, formed last week.
The support exists at Tuesday's close of Rs 500, and closure below could reverse the trend. The stock has been on an uptrend since mid-November this year. The stock trades above the 14-day moving average and the 21-day exponential moving average, indicating a bullish momentum.
It has risen 108% during the last 12 months and has advanced by 100% on a year-to-date basis. The total traded volume so far in the day stood at 6.8 times its 30-day average. The relative strength index was at 75, implying a overbought zone.
Nine out of the 15 analysts tracking the company have a 'buy' rating on the stock, five suggest a 'hold' and one has a 'sell', according to Bloomberg data. The average of 12-month analyst price targets implies a potential upside of 0.8%.
