CLSA sees further re-rating scope in Vedanta; stock rises over 2%

Shares of Vedanta rose as much as 2.8 per cent on Friday after the Hong Kong-based brokerage CLSA in a report said there was scope for further re-rating for the stock. The optimism stems from the company’s plan to expand its alumina refinery capacity and cut costs.

During the brokerage’s visit to the Anil Agarwal group firm’s Jharsuguda smelter, the commodity major indicated it had the potential to more than double the operating profit from its aluminum business to $1,350 per tonne.

Vedanta also expects major cost reductions via alumina refinery capacity expansion, higher power generation efficiency, commissioning coal blocks and bauxite mines, and a smelting capacity increase.

 

“Execution of these profitability improvement initiatives will be key to a re-rating,” said CLSA equity analysts Indrajit Agarwal and Vikas Kumar Jain in a note. For FY24, Vedanta had reported an operating profit of $504/tonne on a volume of 2.4 million tonnes. The company expects a cost reduction of $150/tonne over the next 12-18 months. After hitting a high of Rs 452, shares of Vedanta last closed at Rs 447, up 1.6 per cent. So far this year, shares of the company have rallied over 70 per cent. 

Stanley Lifestyles eyes Rs 537 crore through IPO

Luxury furniture brand Stanley Lifestyles on Friday said it is looking to raise Rs 537 crore through its initial share-sale, which will open for public subscription on June 21. The initial public offering (IPO), with a price band of Rs 351 to Rs 369 per share, will conclude on June 25. The bidding for anchor investors will open for a day on June 20.
 

The IPO comprises fresh issuance of equity shares worth Rs 200 crore and an Offer For Sale (OFS) component of 91.33 lakh equity shares by the company’s promoters and other share­holders to the tune of Rs 337 crore at the upper end of the price band. The net proceeds from the fresh issue to the tune of Rs 90.13 crore will be used by the company for expenditure for opening the new stores, Rs 39.99 crore expenditure for opening the anchor stores and Rs 10.04 crore expenditure for renovation of existing stores. PTI