VEDL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.8
| Stock Code | VEDL | Market Cap | 1,06,187 Cr. | Current Price | 272 ₹ | High / Low | 292 ₹ |
| Stock P/E | 58.4 | Book Value | 200 ₹ | Dividend Yield | 16.0 % | ROCE | 2.74 % |
| ROE | 2.37 % | Face Value | 1.00 ₹ | DMA 50 | 257 ₹ | DMA 200 | 218 ₹ |
| Chg in FII Hold | 1.78 % | Chg in DII Hold | -1.88 % | PAT Qtr | -298 Cr. | PAT Prev Qtr | -56.7 Cr. |
| RSI | 54.9 | MACD | 5.32 | Volume | 7,71,51,197 | Avg Vol 1Wk | 5,02,59,652 |
| Low price | 144 ₹ | High price | 292 ₹ | PEG Ratio | -1.01 | Debt to equity | 0.14 |
| 52w Index | 86.2 % | Qtr Profit Var | 16.1 % | EPS | 45.3 ₹ | Industry PE | 40.9 |
📊 Financials: VEDL shows weak efficiency with ROCE at 2.74% and ROE at 2.37%. Debt-to-equity ratio is manageable at 0.14, but profitability remains poor with negative PAT (-₹298 Cr vs -₹56.7 Cr). EPS of ₹45.3 looks strong, yet earnings volatility undermines consistency.
💹 Valuation: Current P/E of 58.4 is well above industry average (40.9), suggesting stretched valuation despite weak fundamentals. PEG ratio of -1.01 signals growth concerns. P/B ratio (~1.36) is reasonable relative to book value. Dividend yield of 16% is highly attractive but may not be sustainable given losses.
🏢 Business Model & Advantage: VEDL operates in natural resources and metals, benefiting from scale and diversified commodity exposure. However, cyclical earnings, regulatory risks, and weak efficiency metrics limit competitive advantage.
📈 Entry Zone: Safer accumulation near ₹240–₹255 (close to DMA 200 support). Current price (₹272) is near 52-week high (₹292), limiting upside potential.
⏳ Long-Term Holding: High-risk candidate. Suitable only for dividend-focused investors or speculative trades. Long-term holding requires turnaround in profitability and efficiency metrics.
Positive
- Attractive dividend yield (16%)
- Reasonable debt-to-equity ratio (0.14)
- EPS of ₹45.3 supports valuation
- FII holdings increased (+1.78%)
Limitation
- Negative PAT (-₹298 Cr)
- Weak ROCE (2.74%) and ROE (2.37%)
- High P/E (58.4 vs industry 40.9)
- Negative PEG ratio (-1.01)
Company Negative News
- Consistent losses with negative quarterly PAT
- DII holdings decreased (-1.88%), showing reduced domestic confidence
Company Positive News
- Strong dividend yield attracts income investors
- FII inflows (+1.78%) reflect selective foreign confidence
Industry
- Industry P/E at 40.9 indicates moderate sector valuation
- Commodity sector remains cyclical, exposing VEDL to volatility
Conclusion
VEDL offers high dividend yield but suffers from weak profitability and efficiency metrics. Entry is safer near ₹240–₹255, with exits recommended near ₹285–₹290 resistance. Long-term holding is risky unless earnings stabilize and ROCE/ROE improve significantly.