VEDL - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.9

Here’s a robust look into Vedanta Ltd. (VEDL) — a diversified natural resources conglomerate with operations across zinc, copper, aluminium, power, and oil & gas. Strong financial muscle is evident, though valuation challenges and macro risks temper the outlook.

🧾 Core Financial Highlights

ROE: 38.5%, ROCE: 25.3% — outstanding profitability, underscores efficient capital deployment

EPS: ₹38.3 — solid earnings; adds intrinsic value despite broader volatility

Debt-to-Equity: 2.22 — significantly leveraged; raises concern over capital structure rigidity

Dividend Yield: 9.90% — extremely attractive for income-oriented investors

Quarterly PAT: ₹3,483 Cr. (flat vs previous Qtr); sharp QoQ variance (142%) likely reflects seasonality or exceptional income

📊 Valuation Snapshot

Metric Value Insight

P/E Ratio 12.4 Deep discount to industry PE (42.6); reflects sectoral cyclicality

P/B Ratio ~4.19 Reasonable — supported by strong balance sheet and assets

PEG Ratio -1.21 Negative — implies earnings contraction or skewed growth projections

🏭 Business Model & Strategic Positioning

Diversification: Mining (Zinc, Copper, Iron Ore), Power Generation, Oil & Gas

Core Strengths

Vertical integration and pricing power in commodities

Strong cash flows from mining operations

Proven dividend track record

Weaknesses

High debt servicing obligation

Regulatory risks and commodity price volatility

Negative PEG ratio flags uncertain growth outlook

Decline in FII holding (-0.55%) possibly driven by concerns on governance or global macros

📉 Technical and Market Signals

RSI: 43.1 — mildly oversold; could rebound if sector sentiment improves

MACD: -1.79 — momentum weak; lacks bullish confirmation

Price vs DMA

Current Price ~50-DMA (₹447) & near 200-DMA (₹437) — tightly coiled

Support visible near ₹420; resistance remains around ₹470

🎯 Investment View

Entry Zone: ₹420–₹440 — technical and dividend-based value buy range

Target (12–15 months): ₹495–₹520 — contingent on commodity cycles and deleveraging

Investor Profile

Suitable for dividend seekers and contrarians who believe in sector recovery

Requires tolerance for cyclicality, policy risk, and high debt exposure

Would you like me to chart how VEDL’s dividend payouts stack against NTPC or Coal India? Or build a cash flow model that factors in capex plans and interest coverage trends? Let’s peel back another layer if you’re game. 🪨📉📊

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