Monday, 24 June 2024
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Reason for the share price of Vedanta soaring so high

  • Since mid-March 2024, the price of Vedanta shares has been in a base-building phase.
  • The price has increased by 50% to approximately ₹385 per share.
  • Experts think that Vedanta’s debt load will remain a major source of stress for the business.

Since mid-March 2024, the price of Vedanta shares has been in a base-building phase. However, since then, the price has increased by 50% to approximately ₹385 per share.

Three of the four days have witnessed a 52-week high for the company‘s primary business, which deals with metals like copper and aluminum. Experts in the stock market credit the current upward trend to the worldwide spike in commodity prices, especially those of metals like copper and aluminum. They think that Vedanta’s debt load will remain a major source of stress for the business.

Vedanta Shares

Strong quarterly business updates from metal companies, upbeat manufacturing PMI data from China and the US, and investor trust in Vedanta’s efforts to improve its debt and cash profile through capital raising and refinancing are some of the factors that have contributed to the share price rally of the company.

Investors anticipate strong future performance from Vedanta due to its dividend payout, multi-metal exposure, and favorable risk-reward profile. This is especially true given the company’s plan to split its operations with a more focused approach for segments such as semiconductors, oil & gas, copper, zinc, silver, aluminum, and zinc.

Rising commodity prices are cited by Pace 360’s Co-Founder and Chief Global Strategist Amit Goel as a key driver of Vedanta’s share price increase. According to him, the current surge is mostly being caused by internal trends like higher output and capacity growth, as well as the favorable prognosis for the commodities market.

Ongoing debt obligations of the business and prospective revenue trends, however, must be taken into account. Since the stock market is erratic, the current surge may not last in the long run.

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