Motilal Oswal's research report on Vedanta
VEDL announced its plan to demerge its existing business verticals into six independent ‘pure play’ companies. This move aims to unlock stakeholder value, attract strategic investment, improve competencies, and ensure transparency. The proposed demerger is anticipated to conclude, with separate units being listed, within the next 12-15months, subject to all the necessary approvals from shareholders, lenders, creditors, and regulatory authorities. The proposed demerger will be a simple vertical split, i.e., for every one share held in VEDL, the shareholders will receive one additional share of the newly listed five entities. VEDL will remain listed and will include the newly proposed semiconductor and display verticals while also functioning as the holding company for HZL.
Outlook
We reiterate our Neutral rating on VEDL with our SoTPbased TP of INR250. At CMP of INR223, the stock is trading at FY25E EV/EBITDA of 4.9x and FY25E P/B multiple of 2.2x.
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