Global brokerage HSBC slashed price target of non-ferrous stocks — Vedanta and Hindustan Zinc — citing lower commodity prices on April 1.
The research house downgraded Vedanta to hold from buy and cut its price target on the stock by 31 percent to Rs 200 from Rs 290 apiece earlier.
In case of Hindustan Zinc, it cut price target to Rs 250 from Rs 260 though retained hold call.
"Lower commodity prices & appreciating rupee resulted in estimate cuts," HSBC said, adding Vedanta & Hindustan Zinc EBITDA (earnings before interest, tax, depreciation and amortisation) estimates are cut by 8-21 percent.
According to the brokerage, deviation from capital allocation strategy may act as an overhang for Vedanta and higher debt at parent could result in sustained high dividend payout.
Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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