Vedanta Plans $1.9 Billion Capex Strategy For FY25

Vedanta Limited, a subsidiary of Vedanta Resources Limited is the world’s foremost natural resources conglomerate, with strategic assets in India, South Africa, and Namibia. The company is the largest and most diversified natural resources company in Indian history. The company is also known for its highly productive operations, solid financial foundation, and strategic, forward-thinking investments. Indian economy, on the back of significant infrastructure

investment and the government’s focus on manufacturing and urbanization, is growing rapidly. This alongside the emphasis on a green economy, electronics, and digitalization is likely to induce positive economic growth.

Recent News:

The mining major recently published its Annual Report to the investors and mentioned that the UK-based parent company, Vedanta Resources plans to lay off $ 3 billion worth of debt over the next 3 years. With a current debt of $6 Billion as of FY24, the company is facing a host of downgrades. With a pursued target of reaching a capex of $1.9 Billion, Vedanta Group intends to reduce its working capital requirement to obtain this purpose. The company is also undergoing a demerger and plans to expand its capacities for steel and aluminum businesses. In the annual report, forecasts have been made by the company to generate over $4 Billion in EBIDTA. The company, also, aims to operationalize the captive coal blocks in Radhikapur West and Kuraloi North, both in Odisha, this financial year.

Company’s Financials:

 The current market cap of the company is Rs 1,67,126 Crores with a P/E ratio of 45.6. In Q4FY24, the company reported a net income of Rs. 317 billion with EBIDTA at 4.88 billion. Compared, to Q4FY23, the company reported a net profit of Rs. 1369 Crores, a fall of 27.2, and an EBITDA of Rs. 8969 Crores, a 3% QoQ increase.

Conclusion

The news of a 12% increase in capital expenditure aligns with the investment plan in the aluminum business and oil and gas reserves. Based on this investment plan, the company plans a $1.9 Billion in FY25.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.