The metals market has seen a strong performance driven by positive PMI data from China and solid US economic fundamentals, leading to higher commodity prices, especially for base metals. Vedanta has outperformed benchmark Nifty Metal this year so far while Hindalco underperformed. Vedanta has surged over 61 percent in 2024 YTD while Hindalco is up just 5 percent. In comparison, the Nifty Metal index has gained over 17 percent in this period. Both Vedanta and Hindalco have hit their 52-week highs in recent times along with Nifty Metal. Vedanta hit its 52-week high of 419 in intra-day deals today, May 3, 2024. Hindalco touched its all-time high of 661.30 last month on April 26, 2024, and is currently just 2 percent away from the peak. In the long term, 3 years, again Hindalco has emerged as the winner. It has surged 78 percent while Vedanta jumped 61 percent. Sanjay Moorjani, Research Analyst, Samco Securities likes Hindalco better. Parthiv Jhonsa, Lead Analyst (Metal and Mining), Anand Rathi Institutional Equities also picked Hindalco over Vedanta. Sujit Modi, CIO, Share.Market, as well, favours Hindalco. Aditya Welekar, Senior Research Analyst - Auto & Metals, Axis Securities prefers Vedanta over Hindalco.
Motilal Oswal Financial Services believes that Vedanta Ltd., the largest natural resources company in India, is well positioned to benefit from the robust domestic demand. Vedanta's strong product portfolio puts it in a favorable position to capture the domestic growth story. However, the company's cash flows may be under pressure due to multiple capex projects. The recent leveraged merger (LM) has increased the cost of borrowings and reduced the flexibility to deleverage. Vedanta's debt repayment overhang at the holding company (HoldCo) level may continue to impact the company and Hindustan Zinc Ltd. Despite these challenges, Vedanta's stock is currently trading at 6.3 times FY26E enterprise value/Ebitda multiple and 3.8 times FY26E price/book multiple. Motilal Oswal reiterates a Neutral rating on the stock with a target price of Rs 270.
In Monday's trading session, five stocks witnessed a build of fresh long positions. The stocks are Naukri, ETMarkets.com, AU Small Finance Bank, Hindustan Copper, and ETMarkets.com. Hindalco saw a 9.61% increase in stock price and a 0.4% change in open interest. The other stocks also experienced changes in stock price and open interest.