Shares of Vedanta Ltd. gained after billionaire Anil Agarwal's mining company announced its first interim dividend for the fiscal ending March next year.
The total outgo from the interim dividend of Rs 18.5 apiece amounted to Rs 6,877 crore, Vedanta said in an exchange filing post market hours on Wednesday. The record date for the payment of dividend is Sept. 9.
Investec said the payout is lower than its expectations. Reiterating the need for larger payouts, the brokerage said Vedanta is a “strong dividend yield play”.
Here's what Investec has to say:
Maintains ‘hold' rating with a target price of Rs 269, an implied downside of 12.01%.
Announcement of dividend is a welcome move, but the quantum remains short of expectations.
Vedanta has leeway to announce more dividends prior to Oct. 31 as the government has announced relaxation on ITR filings by a month.
Need to watch out for potential divestments in core assets to upstream cash needs.
Shares of Vedanta gained more than 3% around noon on Thursday to Rs 307.85 apiece. Of the 19 analysts tracking the company, 11 maintained a ‘buy', six suggest a ‘hold' and two recommend a ‘sell', according to Bloomberg data. The overall 12-month consensus price target implies an upside of 9.1%.
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