ICICI Direct recommended hold rating on Vedanta with a target price of Rs 260 in its research report dated May 17, 2017.
ICICI Direct's research report on Vedanta
The management has achieved cumulative savings of US$712 million in the last two years (achieved cost saving of US$250 million in FY16, US$462 million in FY17). Out of this, US$682 million is in cost and marketing savings while the balance US$30 million is in capex savings. The programme is ahead of the original plan to deliver US$1.3 billion cumulative savings by H1FY19.
However, we have a cautious view on the company due to volatile base metal and crude oil prices. We value the company using SOTP valuation and arrive at a target price of Rs 260. We have a HOLD recommendation on the stock.
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