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Last Updated : Oct 06, 2020 10:49 PM IST | Source: Moneycontrol.com

Buy Vedanta; target of Rs 170: Emkay Global Financial

Emkay Global Financial is bullish on Vedanta has recommended buy rating on the stock with a target price of Rs 170 in its research report dated October 05, 2020.

Broker Research

Emkay Global Financial's report on Vedanta


Cairn India Holdings Ltd, a 100% subsidiary of Vedanta Ltd (Ved Ltd), has provided a loan of Rs23.11bn to promoter entity Vedanta Resources (Ved Plc) which can extend up to Rs79.05bn ($1.05bn) in loans and guarantees. Contours of the transaction are awaited. Ved Ltd is treating this loan as cash in its books, even though the money has been transferred outside its books, which we believe is not the best way of accounting loans given to parent. Management has reduced Rs42.76/sh of book value in Ved Ltd books through the writeoff of a substantial portion of the O&G book despite Brent hovering around $43/bbl. But advance given to promoter entity KCM is treated as recoverable despite the appointment of a provisional liquidator in KCM.


Outlook


Maintain Buy with a revised TP of Rs170 as delisting price target as we remove the 30% holdCo discount which we applied in the past for the valuation of Ved Ltd as a listed entity on SoTP basis. Ignoring the O&G provisioning, the book value should be Rs189.63/sh.


For all recommendations report, click here


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First Published on Oct 6, 2020 12:41 pm
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