Vedanta Ltd. share price target

VEDL, through its overseas subsidiary CIHL, has advanced an inter-corporate loan of USD956m to its parent Vedanta Resources (VRL) during Apr-Oct'20 (1QFY21 USD307m, 2QFY21 USD200m and Oct'20 USD450m), repayable gradually over the next three years. At the same time, VEDL has passed on <50% of dividend received from subsidiary Hindustan Zinc (HZL). Given lack of clarity on distribution of HZL's dividend and capital allocation concerns, we have raised Holdco discount for HZL to 30% (from 10%). Moreover, high leverage and scheduled debt repayments at parent VRL...

25 June 2020 In a Special Resolution by postal ballot, 93.3% of all shareholders and 84.3% of public shareholders have approved to delist the shares of Vedanta (VEDL). As ensuing steps, VEDL would announce a reverse book building process for shareholders to tender the shares, resulting in the discovery of the final exit offer price. Earlier, on 12 May, the promoter group (led by Vedanta Resources Plc) had shared an Indicative Offer Price (IOP) of INR87.5/share. Price discovery is thus likely to happen at a higher level. We value VEDL at an SOTP-based target price of INR114/sh, built on the expectation of a volume uptick in the Zinc and Oil & Gas businesses as well as 510% higher commodity prices than currently prevailing. Among the public shareholders, 84.3% of votes were in favor of the resolution, against the statutory requirement of 66.

business and lower power sales at TSPL partially offset by higher volume at Aluminium and Iron Ore business, and rupee depreciation. Revenue was lower by 8% sequentially, primarily due to lower commodity prices further impacted by COVID-19, lower volume at Aluminium business and lower power sales at TSPL, past exploration cost recovery at Oil & Gas business in Q3...

Continued volatility in commodity prices were further aggravated by Coronavirus pandemic. Strong Alumina production from Lanjigarh (+18.0% YoY), along with cost efficiencies should be the positive catalyst for upcoming quarters. We reiterate our BUY rating on the stock, with a roll forward target price of Rs. 94 based on 3.9x FY22E EV/EBITDA. Revenue impacted by weakness in metal prices In Q3FY20, revenue dropped 9.9% YoY (-2.8% QoQ) to Rs. 21,126cr, as the LME prices continued to descend. Aluminum revenue declined 10.7% YoY owing to decrease in...

Vedanta Limited is a diversified natural resources company. Our business primarily involves producing oil & gas, zinc - lead - silver, copper, iron ore, aluminum and commercial power. Vedanta Limited is the Indian subsidiary of Vedanta Resources Plc. Governance and Sustainable Development and is at the core of Vedanta's strategy, with a strong focus on health, safety and environment and on enhancing the lives of local communities. The company is conferred with the Confederation of Indian Industry (CII) 'Sustainable Plus Platinum...

The recent pickup in prices of aluminum and zinc along with additional production in the upcoming quarters especially from the ramp-up of Gamsberg should be the key drivers of value. We thereby assign BUY...

Finance cost for Q2 September 2019 was at Rs 1,340 crore, lower by 9% y-o-y, primarily due to reduction in gross borrowings, while on a sequential basis the finance cost remained flat. Exceptional item primarily is a charge of Rs 504 crore, relating to impairment at Avanstrate Inc, partially offset by accrual of interest against pending claims at TSPL based on Supreme Court order giving a net charge of Rs 422 crore. Section 115BAA of the Income-tax Act, 1961 has been introduced by the Taxation Laws...

Vedanta Limited is a natural resource company engaged in the business of manufacturing copper and copper products, and aluminum and aluminum products. The Company has iron ore mining operations in the States of Goa and Karnataka. Its copper business consists of custom smelting. Its power business consists of 2,400 megawatt thermal coal...

Vedantas (VEDL) EBITDA of INR44b (-15% QoQ) was below our estimate of INR47.2b (6% miss) due to higher cost of production (CoP) in the aluminum business and lower margins in the steel business. However, business reported a loss of INR1.1b at the EBITDA level (v/s profit of INR1.8b in 1Q) due to lower LME and higher CoP (up USD88 QoQ led by higher power cost due to lower linkage coal availability). EBITDA increased 62% QoQ to INR2.1b, led by lower CoP and higher sales, partly offset by lower realizations. had reported an EBITDA of ~INR21b. For 1HFY20, EBITDA/PBT was down 15%/36% YoY at INR96/INR36b. We cut our FY20/21 EBITDA estimate by 10/9% on the back of higher costs for the aluminum business. While the company expects its aluminum CoP to reduce through higher captive bauxite and coal linkages, coal availability issues may impact costs over the near term. Aluminum reported CoP was higher due to higher power cost.

During the quarter, blended cost of production (CoP) of the aluminium segment fell QoQ from US$1810/tonne in Q4FY19 to US$1764/tonne in Q1FY20. Despite the fall in CoP, on the back of the muted trend in aluminium prices, the blended EBITDA/tonne of the aluminium business declined from US$131/tonne in Q4FY19 to US$64/tonne in Q1FY20. Currently, LME aluminium prices are hovering at ~US$1777/tonne (Q1FY20 average...