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News Topical, Digital Desk : If you bought Vedanta shares and, seeing the recent decline, are wondering what will happen next, the story isn't over yet. There's no shortage of market believers who believe Vedanta has a big growth story ahead. Several key triggers, such as the demerger, aluminum business, a weak rupee, and value unlocking, remain. This means that those who remain patient may see their next gains. Before we delve further into the details, Vedanta shares opened at ₹758.80 on April 23rd, compared to a closing price of ₹757.00. The stock has since fallen below ₹750.
Now, over the past three days, the stock has slipped slightly. Ramesh became worried. He opened his mobile, looked at the price, and a look of worry appeared on his forehead. He wondered, "Should I get out now?" But this is where the difference between a prudent investor and a panicked one lies. .
First, look back, then consider the future. In 2020, this same stock was at a delisting price of around ₹87. From there, over the next six years, the stock has risen nearly 10-fold. What does this mean? The company created value, the market recognized it, and investors received returns.
Now the question is, is it all over? Many experts believe no. A new chapter is still to come—the demerger. The demerger of Vedanta Limited is being considered a major trigger for the market. When a large company splits into separate business units, the true value of each business is often revealed. Until now, Vedanta has been viewed as a large conglomerate. But after the demerger, investors will be able to better assess the strength of individual businesses. The record date has been set for May 1st. That's why the market is watching.
Who is the real game changer? Aluminum Business Now, suppose Ramesh asked, "Who could be the biggest beneficiary?" The answer is the aluminum business. Market buzz is rife that Vedanta's aluminum business could become the next big wealth creator. The reasons are compelling. If LME aluminum prices rise by 10%, the company's EBITDA could increase by approximately $445 million. Supply is disrupted in Warangal. Smelting capacity is unlikely to return to normal soon. This means that if demand remains strong and supply remains tight, prices could be supported.
A weak rupee also helps. When the rupee weakens against the dollar, export and commodity-linked companies like Vedanta can benefit. It is estimated that for every ₹1 depreciation, the company's EBITDA could increase by approximately ₹900 to ₹950 crore. Ramesh now smiled slightly...
Understand the game of valuations. Some brokerages are valuing the aluminum business at a 6.5x EBITDA multiple. But if the market starts valuing it at 7x, the overall valuation could increase. There can be a significant difference. This means that a stock can rise not just due to increased profits, but also due to a shift in market sentiment.
So why the decline? After every rally, some investors book profits. The recent three-day decline is being viewed in the same way. It doesn't always mean weakness. Sometimes, it's necessary to take a breather after a big rally.
What should you do? If you bought at a high level, there's no need to panic every day by looking at the price. First, understand this: The company has a demerger trigger. The aluminum business is a strong factor. The rupee weakness could benefit. The stock is still near its record high. Lesson from the final story
Ramesh now has to decide whether to choose patience over hasty selling. He understands that good stocks don't make profits in a single day; they do so over time. For those who have bought into Vedanta Limited, the question isn't just about today, but about the next inning. And in the market, the biggest gains often come from those who understand the story, not the noise.
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