Vedanta Limited - Research Report

Vedanta Limited is a A /T+2 group Diversified Metals sector company having Face value of Rs 1.00. Vedanta Limited is one of the world's leading diversified natural resources companies. The company's main businesses focus on zinc lead silver Aluminium copper iron ore oil & gas and commercial power. Its operations span across India South Africa Namibia Ireland and Australia. Vedanta Limited is the Indian subsidiary of London listed Vedanta Resources Plc. It is India`s largest producer and exporter of iron ore in the private sector and is on course to be in the league of top four iron ore producing companies in the World.

Fundamentals (FY23):

Financial Results:

Company’s Net Sales Rs 38,622.00 crore in June 2022 up 35.94%, Quarterly Net Profit at Rs. 4,421.00 crore in June 2022 up 4.66% and its EBITDA stands at Rs. 10,930.00 crore in June 2022 up 3.02% compared to June 2021.

List of orders bagged by the company:

1. Vedanta in collaboration with IIT-Bombay has introduced an approach of manufacturing green steel by using hydrogen instead of coke to manufacture pig iron. They also claim to implement a process that turns coke ovens green. All the eco-friendly methods will carry out extraction and harnessing to reduce CO2 emission with an investment of $5 billion for the coming ten years to speed up their process and reach net-zero emissions.
2. Vedanta Limited plans to source 580 MW of renewable energy for its operations across India. For that, Vedanta has signed a power delivery agreement with affiliates of Sterlite Power Technologies Pvt Ltd (SPTPL) – a company engaged in business to supply hybrid‐based power with solar, wind and storage solutions. With this, Vedanta aims to partially replace existing captive thermal power capacities with renewable energy for smelting and other operations and meet power requirements of capacity expansion at Vedanta Aluminium‐ Jharsuguda, Balco and Hindustan Zinc.
3. Vedanta group’s Electro steel Limited (ESL) is planning to convert its 35 small cars into Electrical Vehicles (EVs) by 2023 and conversion of buses in the next phase with an aim to completely shift to EVs by 2025. ESL recently launched 40 E-cycles and 10 E-scooters under its ESL Rides Green campaign in association with EVeez, an electric vehicle subscription platform.
4. In January, 2022 Vedanta’s Aluminium Business, has signed an agreement with GEAR (Gemini Equipment and Rentals Private Limited) India, to deploy one of the largest fleets of 23 lithium-ion battery-powered electric forklifts, becoming the first in Indian Aluminium industry to undertake such an initiative. It will also have IOT- based Smart Fleet Management system for enhanced safety at site.
5. Vedanta Resources, which has the single largest investment of Rs 80,000 crore in Odisha, plans to pump in another Rs 25,000 crore for expansion of its Aluminium, ferrochrome and mining businesses in the state.
6. Recently, JV of the Vedanta and Foxconn had signed a Memorandum of Understanding (MoU) with the Gujarat government to invest Rs 1,54,000 crore to set up to set up the semiconductor and a display fabrication plant in the state which will create more than 1 lac jobs. This is one of the biggest investments so far in the history of Independent India.

In past three years the stock gave a return of 65.12% as compared to Nifty which gave a return of 46.09% and 65.04% return compared to 45.30% rise in Sensex.

Vedanta Aluminium has already reduced its GHG emissions intensity by 21% in FY21 while almost tripling its production, over FY12 baseline. The company is also a member of the prestigious Dow Jones Sustainability Index (DJSI) family and ranked 4th amongst global Aluminium producers in 2021

Company is going to get benefits of increasing demand in Li-ion batteries and Aluminium electrolyzer for Green Hydrogen production in upcoming years as India targets to reduce its CO2 emissions in upcoming years.  Considering company’s core businesses, good financial records and higher growth focused prospects, the stock is recommended for long term period.

 - HET ZAVERI

- info@smartinvestment.in

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