Vedanta Share Price

Vedanta Ltd. Fundamental Analysis

It is the aim of this article to go over Vedanta Ltd. and understand more about its business model as well as industry to determine if it would suit your investment.

Vedanta Limited

Vedanta Limited is an Indian mining multinational corporation located in Mumbai. It is one of the top natural resources firms globally, and a subsidiary of Vedanta Resources Limited.

The company has significant operations in various countries including India, South Africa, Namibia, Liberia, UAE, Korea, Taiwan, and Japan. Its main operations are in iron ore, gold, and aluminum mines in Goa, Karnataka, Rajasthan, and Odisha.

The company’s journey has been synonymous with India’s growth story as a leading natural resources and technology conglomerate, focused on operational excellence benchmarked to global standards. It has a diversified portfolio with notable operations in Oil & Gas (E&P), Zinc, Lead, Silver, Copper, Iron Ore, Steel, Nickel Aluminium Power & Glass Substrate.

Additionally, Vedanta Limited is venturing into semiconductors as well as display glass.

Is the Mining sector a goldmine investment?

Investing in mining companies in India can be a good choice considering the country’s abundant mineral resources, including bauxite, chromite, and iron ore, which fuel various industries and propel economic growth. The mining industry contributes significantly to India’s GDP and foreign exchange earnings. Private companies, which are market leaders in their respective manufacturing industries, own the majority of India’s mines. Foreign parties can invest up to 100 percent in these companies’ equity under the Indian FDI policy.

Among the mining companies, Vedanta Limited stands out as a good choice for investment. The company continues to focus on cost optimization initiatives, disciplined capital investments, and safe operations across businesses. Vedanta’s commitment to providing essential raw materials for various end-use industries, its adoption of digital and operational practices, and its contribution to the nation’s growth make it a promising investment.

Who are Vedanta Limited’s competitors in the Building Materials Sector?

Vedanta Limited is one of the companies in a sector called Building Materials and operates in an environment with competition from many other firms. Some of its main rivals are:

• 3M India Ltd.
• Adani Enterprises Ltd.
• Grasim Industries Ltd.
• Pidilite Industries Ltd.
• Reliance Industries Ltd.

History of Vedanta Limited

Vedanta Limited is an Indian multinational mining company with a rich history:

• Incorporation: Vedanta, initially known as Sterlite Industries, was founded in the 1980s by D.P. Agarwal in Mumbai. It was incorporated on June 25, 1965.
• Product Range: Vedanta’s product portfolio is diverse, including zinc, lead, oil and gas, iron ore, aluminum, copper, gold, silver, and more.
• Infrastructure: Vedanta operates across India, South Africa, Liberia, and Namibia, with interests in oil & gas, zinc-lead-silver, aluminum, iron ore, steel, copper, ferro alloys, power, nickel, semiconductor, and glass.
• Certifications: Vedanta’s products are certified by the Bureau of Indian Standards (BIS). It has also received the Environmental Product Declaration (EPD) International verification.
• Awards and Recognition: Vedanta has been recognized for its excellence in various fields. It has received the Golden Peacock Global Award, Kincentric Best Employer Award, and has been recognized as a Great Place to Work.

Vedanta Limited continues to contribute significantly to India’s growth and the global natural resources industry.

Company Profile of Vedanta Limited

Pros:

• Strong Operational Performance: Vedanta had a strong operational and financial performance in FY 2024..
• Diverse Assets: Vedanta continues to promote structurally low-cost and diverse assets with excellent potential, which fuel its growth ambitions.
• High Dividend Stock: The company’s EBITDA/Sales ratio is relatively high and results in high margins before depreciation, amortization, and taxes. This makes Vedanta a major interest to investors in search of a high dividend stock.

Cons:

• Debt Concerns: Vedanta Resources Limited, the group’s London-based entity, has a huge pile of debt, including $500 million of loan repayments due on December 31, 2023, and a $1 billion bond due in January 2024. Approximately $4 billion in payments are due from the company over the course of the next fiscal year, ending in 2025
• Demerger Plans: Vedanta announced plans for a demerger into six different entities. While this move is intended to unlock significant shareholder value, it does not resolve the concerns around the massive debt of the company.
• Rating Watch with Negative Implications: Vedanta Limited’s long-term bank facilities and debt instruments have been put on ‘Rating Watch with Negative Implications’ by CRISIL Ratings.

The Finances

Here’s a summary of Vedanta Limited’s financial information as of May 2024:

Shareholding pattern of Vedanta Limited

The shareholding pattern of Vedanta Limited are as follows:

• Promoters: Hold 62.0%.
• Foreign Institutional Investors (FII): 8.8%
• Domestic Institutional Investors (DII): 13.2%
• Public: 15.9%

Peer Multiple Comparison

Vedanta Limited operates in a competitive industry with several key players. Let’s compare Vedanta Ltd. with some of it competitors: