Vedanta shares in focus today after parent firm reduces debt by $1 bn

Shares of metal and mining major Vedanta Ltd are in focus today after the firm’s parent group Vedanta Resources Limited announced that it has paid all its maturing loans and bonds due in April 2023, thereby reducing its gross debt by a further $1 billion.

Vedanta stock closed 0.56% lower at Rs 273.70 on Monday against the previous close of Rs 276.80 on BSE. Market cap of the firm stood at Rs 1.02 lakh crore. The stock has been falling for the last three sessions.

In terms of technicals, the relative strength index (RSI) of Vedanta stands at 46.3, signaling neither the stock is overbought nor oversold. The stock has a one-year beta of 1.6, indicating very high volatility during the period. Vedanta shares stand lower than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

In a year, the stock is down 34% and fallen 10.69% this year. It hit a 52 week high of Rs 424.85 on April 22, 2022 and a 52 week low of Rs 206.10 on July 1, 2022.

The PE ratio of Vedanta stands at 7.05 signaling the stock is undervalued compared to its industry. The PE of the mining industry stands at 14.39.

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Vedanta’s gross debt stands at $6.8 bn as of April 24, 2023, down from $7.8 billion at the end of March 2023 (as announced on February 15) and down from $9.7 billion at the end of March 2022.

"During the balance of FY24, we believe that strong operational performance from our world class asset base coupled with robust commodity prices will lead to further deleveraging at Vedanta," said the natural resources company.

In its Q4 update, the Mumbai-based mining company said that its total aluminium production almost came flat. Vedanta said total aluminium production rose 0.3 percent at 574 kt in Q4 as compared to 572 kt in the same period last fiscal. It also added that the cast metal aluminium production rose 1 percent quarter-on-quarter with Jharsuguda ramp up.

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