Reasonably priced with a high dividend yield of over 10%
As for its valuations, the scrip looks reasonably priced with a TTM PE of 6.2 compared to the sector’s PE of 9.03. Also, the company is good and consistent in dividend payouts. For FY23, the company announced an interim dividend of Rs. 31.5 per share, the record date of which was May 9, 2022. This, at the current price, would mean a dividend yield of 10.01 %.
The company’s plan for future technologies such as its venture into the semiconductor space
Additionally, the diversified entity is also foraying into future technologies such as semiconductors that will boost its profits. In April this year, company chairman Anil Agarwal said that in partnership with Foxconn, he would come up with a semiconductor plan in 2 years. At the same time, he reiterated that progress in the semiconductor industry would bode well for other sectors such as automotive and electronics in the country.
Vedanta and other miners will benefit from SC decision
The Supreme Court, in a recent decision, has authorized the export of already mined iron ore from the 3 districts of Karnataka under the said conditions. Additionally, they would no longer have to go through the usual electronic auction process and could instead sell shares in various mines in the 3 districts of Karnataka. This decision will benefit Vedanta and other miners.
he large-cap infra space company is another quality stock that operates in technology, engineering, construction, manufacturing, and financial services. The company’s highest and lowest prices are Rs. 2078.55 and Rs. 16.67, implying gains of 1660%.
Speaking of its financials, although the company’s revenue has improved steadily, there is a heavy hit in the net profit for the Fy22 period. The company’s net income increased from Rs. 11,582.93 crore in Fy21 to Rs. 8,541 crore.
Decent valuations and healthy order book for Fy23
From a valuation perspective, the stock also appears to be decently valued relative to its peers. Moreover, what works in the company’s favor is a solid order book and its efforts to become a debt-free entity. Analysts see the company’s potential order book of Rs. 8.53 trillion for Fy23 as a good omen.
Efforts to soon be a debt-free company through the sale of non-core assets and loss-making projects
During an exclusive interview with one of the leading daily newspapers, the CEO of the company said that 3 projects have been identified for this purpose, namely Hyderabad Metro, Nabha Power and L&T Infrastructure Development – with the aim of reducing its debt of ₹40,000 crore (excluding that of L&T Financial Services). “L&T’s gross debt is ₹1.24,000 crore, but it includes ₹84,000 crore from L&T Finance. So we have debt of ₹40,000 crore, which includes ₹13,000 crore from Hyderabad Metro and 6 ₹000 crore of Nabha Power debt is only ₹20,000 crore and that too is for working capital purposes,” he said.
The share for the financial year 2021 announced a dividend of 1100% amounting to Rs. 22 per share, which translates into a dividend yield of 1.37%.
Although the above 2 stocks are fundamentally strong and are attractively priced after the correction, please do not take this as a call to invest in them. Investors should engage in their own due diligence before betting on any market-related security.