VEDL - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.1

📊 Core Financials Breakdown

Profitability

ROE: 21.8% and ROCE: 18.5% — strong, indicating efficient capital deployment and solid operational performance.

EPS: ₹49.8, with PAT at ₹3,927 Cr. (down from ₹1,504 Cr. in the previous quarter) — a 6.13% decline, but still robust earnings.

Debt-to-equity: 0.76 — moderate leverage, acceptable for a capital-intensive business like mining and metals.

Dividend Yield: 9.55% — exceptionally high, making VEDL attractive for income-focused investors.

Institutional Sentiment

FII holding declined (-0.55%), while DII increased (+0.09%) — mixed sentiment, possibly reflecting caution amid global commodity volatility.

💰 Valuation Metrics

Metric Value Insight

P/E Ratio 11.8 Deeply undervalued vs. industry average (49.4).

P/B Ratio ~2.36 Reasonable — priced slightly above book value.

PEG Ratio -2.93 Negative — suggests earnings contraction or volatility.

Intrinsic Value ~₹470–₹490 (est.) Current price of ₹456 is slightly below fair value.

🧠 Business Model & Competitive Edge

Core Operations: Vedanta Ltd. is a diversified natural resources company with operations in zinc, copper, aluminum, iron ore, oil & gas, and power.

Strengths

Vertical integration across multiple commodities.

Strong cash flows and dividend payout history.

Expansion plans in aluminum and power sectors, including a 3 MTPA smelter in Odisha

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Challenges

Commodity price sensitivity and regulatory risks.

PEG ratio and profit contraction suggest earnings volatility.

RSI at 58.7 — neutral, MACD at 4.18 — mild bullish momentum.

📈 Entry Zone & Technicals

DMA 50: ₹442, DMA 200: ₹438 — price is above both, indicating short-term strength.

RSI: 58.7 — neutral zone.

MACD: 4.18 — bullish crossover.

📌 Entry Zone: ₹440–₹455 — attractive for accumulation given valuation and dividend yield.

🕰️ Long-Term Holding Guidance

2025 Target: ₹427.5–₹529.6

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2026 Target: ₹529.6–₹564.2

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2030 Target: ₹831.86–₹1,419.72 (bullish scenario)

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Holding Strategy: VEDL is a value-oriented play with strong fundamentals, high dividend yield, and diversified exposure to commodities. Ideal for long-term investors seeking income and cyclical upside. Accumulate during dips and hold through commodity cycles.

For deeper insights, check the VEDL forecast and valuation breakdown

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or explore Dailybulls’ long-term projections

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stockanalysis.com

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stocks-buy.com

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dailybulls.in

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