Fundamental Analysis of Stocks

Fundamental analysis of stocks based on the quarterly and annual reports of the companies.

July 26, 2023

Fundamental Analysis of Stocks

NTPC Share Price: All You Need To Know

Introduction

The vision of this company is “To be the World’s leading power company, energizing India’s growth,” and it has stood up to its expectations over the last three decades. Although the name is National Thermal Power Corporation, the company has power generating capacity across Wind, Solar, and Renewable, expanding into newer sources of green energy.

Let us study this institution in detail and understand how it intends to create value for various stakeholders.

NTPC Company Overview

NTPC was established in 1975 as a government-owned company. In 1976 Mr. D.V Kapur became the company’s first Chairman and Managing Director. Since then, NTPC has established itself as the dominant power major with a presence in the entire value chain of the power generation business. From fossil fuels, it has forayed into generating electricity via hydro, nuclear, and renewable energy sources.

To strengthen its core business, the corporation has diversified into consultancy, power trading, training of power professionals, rural electrification, ash utilization, and coal mining.

The company’s total installed capacity is 73,024 MW (including JVs). Own stations include 23 coal-based, seven gas-based, 1 Hydro, 1 Wind, 18 Solar, and 1 Small hydro plant. Under JV, NTPC has nine coals based, four gas based, 8 Hydro based, and five renewable energy projects.

NTPC contributes 20.96% of total power generation due to its focus on high efficiency. In October 2004, NTPC launched its Initial Public Offering (IPO) consisting of 5.25% as a fresh issue and 5.25% as an offer for sale by the Government of India. NTPC is also expanding its global footprint by venturing into the power sector worldwide.

The company is expanding globally by providing the following services:

Project development
Takeover and Turning around of underperforming Power Projects,
Concept to Commissioning and Beyond for Coal / Gas Based and Renewable Energy Projects.

NTPC Company Journey

NTPC has had a long and illustrious history. Here are some of the critical milestones in the company:

Here is a timeline of NTPC history:

1975: NTPC was incorporated as a 100% Government of India (GOI) owned company
1982: First Unit commissioned at Singrauli, Uttar Pradesh – 200MW
1997: Accorded Navratna status
2004: Stock listed on NSE and BSE
2010: GOI accorded Maharatna status
2012: Commissioned First Super Critical Unit
2013: First RE (Solar) project commissioned
2015: First Hydro project commissioned
2016: NTPC started mining at its 1^st coal block, Pakri Barwadih, in Jharkhand
2017: Group capacity crossed 50,000 MW mark & commissioning of 1^st wind turbine
2019: Commissioned India’s 1^st Ultra-supercritical & most efficient plant (Khargone)
2020: Recorded highest single-day gen (977.07 Mus)
2021: Became the 1^st energy company to declare energy compact goals
2021: Largest Floating Solar PV Project in the country was commissioned at NTPC Simhadri

NTPC Management Profile

Mr. Gurdeep Singh is the Chairman & Managing Director of NTPC Limited since 2016. Before joining NTPC, he was Managing Director of Gujarat State Electricity Company Limited. He has had an illustrious career spanning over three decades in the power sector. He graduated in Mechanical Engineering from NIT Kurukshetra and has undergone Management Education Program from IIM Ahmedabad. He has launched a series of initiatives to sustain NTPC’s growth and bring about the cultural change necessary to maintain NTPC’s position as a leading global energy company.

Mr. Dillip Kumar Patel has been the Director (HR) of NTPC Limited since 1^st April 2020. He started his career at NTPC in 1986 as an Engineering Executive Trainee. He graduated in Mechanical Engineering from NIT, Rourkela, and did his Post Graduate Diploma in Business Management (HR & Finance) from MDI, Gurgaon. He has over three decades of experience in both line and HR functions. He has undertaken various challenging assignments and has successfully managed HR functions while working at various locations comprising thermal, hydro, and JVs, as well as taken-over projects.

Mr. Ramesh Babu is the Director (Operations) of NTPC Limited. He joined National Thermal Power Corporation Limited as an Executive Trainee in 1987. He graduated in Mechanical Engineering from NIT, Srinagar, and did his master’s degree in Thermal Engineering from IIT Delhi. As a Professional Manager and Strategic Planner, he has led several initiatives for improving the reliability and efficiency of plants. He has over 34 years of vast experience with outstanding contributions in the management of large-size plants in the area of power plant operation & maintenance, renovation & modernization of old units, and the efficiency and systems improvement of thermal plants.

Mr. Jaikumar Srinivasan is the Director (Finance) of National Thermal Power Corporation Limited. He joined the company in 2022. He is a commerce Graduate and an Associate Member of the Institute of Cost Accountants of India. He has more than 30 years of experience in the Power and Mining sector in State and Central PSUs in the field of Finance.

Mr. Ujjwal Kanti Bhattacharya is the Director (Projects) of NTPC. He joined National Thermal Power Corporation Limited in 1984 as the 9^th batch of Engineering Executive Trainees. He is an Electrical Engineering Graduate from Jadavpur University, Kolkata, and a PG Diploma in Management from MDI, Gurgaon. He is directly responsible for the entire portfolio of Engineering, Projects, R&D, Dispute resolution cell and International Business Development (IBD), IT, and ERP activities as functional Director of these important verticals of NTPC.

NTPC Shareholding Pattern

NTPC Company Analysis

NTPC is into the following business segments:

Generation of Energy – The Company’s principal business is generating and selling bulk power to state power utilities.
Others – This segment includes consultancy, project management and supervision, energy trading, oil and gas exploration, and coal mining.

Source: NTPC Quarterly Results – March 2023

NTPC Fundamental Analysis

National Thermal Power Corporation Limited is India’s largest energy conglomerate, steadily growing in thermal/hydro capacity addition, pumped hydro, coal mining growth, and renewable energy through new company formation.

The company’s total installed capacity is 73,024 MW, but National Thermal Power Corporation Limited has embarked upon an ambitious plan to attain a total installed capacity of 130 GW by 2032. For that, NTPC established a new company, “NTPC Renewable Energy Limited” (NTPC REL), to focus and speed up the timely implementation of projects in the Renewable Energy portfolio.

Following is a break-up of the current capacity:

Sr. No	Number of Plants	Capacity (MW)
NTPC Owned	–	–
Coal	26	51,810
Gas/Liquid Fuel	7	4,017
Hydro	1	800
Small Hydro	1	8
Solar PV	15	403
Wind	1	50
Total (NTPC Owned)	50	57,038
Owned by JVs/Subsidiaries	–	–
Coal	9	7,664
Gas/Liquid Fuel	4	2,494
Hydro	8	2,925
Small Hydro	1	24
Wind	3	163
Solar	14	2,716
Total (JVs/Subsidiaries)	39	15,986
Total	89	73,024

Source: NTPC Website

National Thermal Power Corporation Limited is also focusing on other business sectors like providing consultancy, power trading, training of power professionals, rural electrification, ash utilization, oil and gas exploration, and coal mining. To focus on these sectors, the company established subsidiary companies that are engaged in businesses other than power generation.

Revenue and Profitability

The total Income of the group for FY23 is INR 177,977 crore as against the previous year’s Total Income of INR 134,994 crore, registering an increase of 31.84%. PAT of the group for FY23 is INR 17,121 crore as against the previous year’s PAT of INR 16,960 crore. It has delivered a 5-year Revenue CAGR of 15.13%, while the PAT CAGR has been 4.05%.

Source: NTPC Annual Report FY22 to FY20 and NTPC Quarterly Results – March 2023

Return on Capital Employed

National Thermal Power Corporation Limited has delivered low ROCE numbers historically. The company has been doing 9-10% ROCE over the last four years, from FY20 to FY23, because of its high capital base.

The company has a high debt-to-equity ratio of ~1.5x as it uses debt to fund its expansion plans. In spite of this, the company pays handsome dividends, and its dividend payout ratio is ~40%. No wonder its annual borrowings have been increasing consistently year on year.

NTPC Share Price History

While NTPC has delivered a three-year stock price CAGR of 29% (INR 90.40 on 10^th July 2020 to INR 187.45 on 14^th July 2023), its 10-year stock price CAGR has been a dismal 5%. High debt, low ROCE, and high dividend outflow could be reasons the stock is not doing well over the long term.

NTPC Strengths & Risks

The company has delivered stellar growth over the last couple of years. Going forward, the company is looking to augment its capacity. By 2023, the company is looking to install 60 GW of renewable energy capacity out of the total 130 GW it intends to reach.

Non-fossil fuel-based capacity would achieve a share of 30%, and thermal-based generating capacity share would be 70%. Coal would continue as the predominant fuel, with a 65% share of coal-based capacity in the portfolio. Following is a break-up of the proposed capacity by 2032.

In GW	By 2032	% Mix
Coal	85	65.4
Gas	6	4.6
Hydro	5	3.8
Solar	30	23.2
Other RE	2	1.5
Nuclear	2	1.5
Total	130	100

Source: NTPC Website

National Thermal Power Corporation Limited remains the only hybrid player in the power sector, with growth from thermal/hydro capacity additions, pumped hydro, captive coal mining increase, and renewed aggression in renewables through new company formation/bilateral tie-ups to secure guaranteed C&I (Commerical and Industrial) business.

New initiatives:

Green Hydrogen: The company is exploring opportunities to produce green hydrogen using electricity from RE sources for mobility, production of green fuel (ammonia, methanol), establishing microgrids, natural gas blending with hydrogen for CGDs, etc.
E-Mobility: It envisages providing hydrogen and pure electric powertrain-based green mobility solutions for public transport, including hydrogen fuel cell-based EVs and pure battery-operated electric buses. The company’s subsidiary has supplied 40 e-buses to the Department of Transport, Andaman & Nicobar, and 90 e-buses to Bengaluru Metropolitan Transport Corporation. Approximately 1000 chargers are planned for installation at 204 locations.
International Business: NTPC is exploring business opportunities in the areas of power generation, PMC, O&M contracting, R&M of power plants, capacity building, etc., in regions such as the Middle East, South East Asia, CIS regions, Latin America and Africa

Key risks

The generation cost of thermal power may increase due to renewable capacity expansion: To increase the share of power from renewable sources into the grid, coal-based plants must regulate their generation and operate at technical minimum capacity, frequent load fluctuations, and two-shift operations. This would result in lower efficiency, leading to a higher generation cost. Reduced life due to flexible operations and the cost of balancing services would also increase the generation cost.

Challenges in scaling up Renewable Energy: There is a major dependency on China to source the required raw materials for setting up solar capacity. Further, the government has imposed basic customs duty on imported modules and increased the GST rate for specified renewable energy parts from 5% to 12%, increasing the cost of setting up a solar power plant. Wind energy has not scaled up due to the unavailability of good wind land locations.

The weak financial position of distribution companies: State distribution companies remain the weakest link in the power sector. The company’s collections may be affected if power sector reforms do not fundamentally improve state power utilities’ financial position.

Fuel Shortage: Imported coal prices have risen steeply. Fuel shortage would result in declining PAFs and, therefore, reduced profitability. NTPC has managed to mitigate this by increasing production from captive coal mines and arranging imported coal.

*Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as recommendation or investment advice by Research & Ranking. We will not be liable for any losses that may occur. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

FAQs

Is NTPC Ltd good to buy for the long term?

NTPC is a Maharatna company with strong support from the government. The company has the potential to grow in line with the GDP growth rate of the country. However, you should be cautious about the entry valuation and make sure there is enough margin of safety. Regular dividend payment is an added advantage that adds to the overall returns.

What is the face value of NTPC Ltd? Share?

The face value of NTPC is INR 10 per share.

What is the Market cap of NTPC Ltd?

The market cap of NTPC Ltd is INR 1,86,612 crores as of 20^th July 2023.

July 24, 2023

Fundamental Analysis of Stocks

Adani Green Share Price Analysis: All You Need To Know

Introduction

India has set a very ambitious target of meeting 50% of its energy requirements through renewables and reducing cumulative emissions by one billion tonnes by 2030. However, as of February 2023, renewable energy only constituted 12.3% of India’s overall energy mix, opening up massive opportunities for companies operating in the renewable sector.

This article delves into Adani Green Energy Limited, one of India’s prominent players in the renewable energy sector, examining its potential for future growth. Let’s explore this further.

Overview of Adani Green

Adani Green Energy Limited (AGEL) was incorporated in the year 2016 and currently has over 8024 MW operational renewable portfolio. In its initial days, the company began with a 20MW capacity wind power in partnership with Inox Wind. In 2017, AGEL brought all the solar energy portfolio under Adani Enterprise and listed itself on the stock exchanges.

In the following years, Adani Green made a series of acquisitions to expand its renewable portfolio and become a substantial player in India’s renewable energy story.

Some notable acquisitions AGEL made are Essel Group’s solar power portfolio in mid-2019, Inox Wind’s 50 MW wind power project at Dayapur, Kutch, and Softbank Group-backed SB Energy Holdings Limited in May 2021. In January 2021, French energy giant Total Energies acquired 20% minority interest in Adani Green for about $2 billion.

Adani Green Company Analysis

Adani Green is India’s leading renewable energy company engaged in developing, owning, and maintaining solar and wind power plants. Currently, the company has 8,024 MW of operational renewable portfolio in India, of which 4,913 MW is solar, 971 MW is wind, and 2140 MW is hybrid operational capacity spread across 12 states.

The solar portfolio has 24.7% CUF (Capacity Utilization Factor), while the wind energy portfolio has 25.2% CUF. And the hybrid portfolio achieved 35.5% CUF in FY23. Its 2,140 MW wind-solar hybrid power plant in Rajasthan is the world’s largest renewable energy park, entirely executed by Adani Green.

The company has secured its entire renewable portfolio with long-term power purchase agreements (PPAs) with an average portfolio tariff of ₹2.98 per unit. 89% of AGEL’s current portfolio has PPAs with sovereign counterparties such as NTPC, SECI, NHPC, and State DISCOMs, helping it to have a predictable cash flow.

In the solar segment, the plant availability averaged above 99% in FY23. While in the wind segment, it was 94.3%.

Projects Under Execution

Adani Green has a locked-in portfolio of 12,348 MW, with 1,889 MW nearing completion and 10,449 MW in various stages of development and approvals. In the medium term, the company’s total locked-in growth is 20.4 GW.

The company plans to have a total installed capacity of 45 GW, around 10% of India’s renewable energy target by 2030. To fuel the growth, the company has identified about 2 lakh acres of land in strategic locations in Rajasthan and Gujarat, predominantly owned by the government.

Shareholding Pattern

Key Management Personnel

Mr. Amit Singh is the Chief Executive Officer and was appointed on 11th May 2023. He is an IIT Delhi graduate with over 22 years of experience in the oilfield, energy transition, and digital transition in the energy sector, working in multiple geographies, including middle-east and Europe. Mr. Singh joined AGEL from Schlumberger, based in London.

Mr. Vineet S. Jaain is the Managing Director at AGEL and was previously the CEO. He has been associated with the Adani Group for more than 15 years. Under his able leadership and deep technical understanding of the sector, the group executed the world’s largest solar plant of that time at Kamuthi and India’s largest solar module manufacturing facility. Mr. Jaain joined the Adani Group as Joint President of Adani Power in 2006 from Jindal Steel & Power Ltd.

Mr. Sagar R. Adani is the Executive Director, leading the group’s foray into renewable energy and has been associated with the company since its inception. He holds a degree in Economics from Brown University, USA.

Mr. Phuntsok Wangyal is the Chief Financial Officer and joined AGEL in September 2022 from Engie India. He has substantial experience in the renewable sector and is skilled in mergers and acquisitions, financial structuring, corporate finance, and valuations. Mr. Wangyal specialized in the finance stream from IIM Bangalore and is an alumnus of St. Joseph’s Academy, Dehradun.

Adani Green Financials

Revenue

In FY23, Adani Green recorded a 54% growth in revenue from power supply to ₹5,825 crores compared to ₹3,783 crores. The company reports all its revenue under a single business segment, and the group’s revenue is from domestic sales.

EBITDA

The company recorded 56.88% growth in EBITDA during FY23 at ₹5,538 crores, compared to ₹3,530 crores in FY22.

The company consistently records an EBITDA margin of more than 90% in the last three financial years.

Net Profit

In FY23, Adani Green recorded a 99% growth in net profit at ₹973 crores, up from ₹489 crores in FY22. The company incurs significant expenses toward interest payments, which results in reduced net earnings. During FY23, AGEL expended ₹2,911 crores on interest payments on loans.

Adani Green Ratio Analysis

Current Ratio: At the end of 31 March 2023, Adani Green reported an 18% decline in the current ratio to 0.68 times from 0.83 times in FY22.

Debt-to-equity Ratio: Adani Green’s debt-to-equity ratio improved to 1.96 times in FY23 from 5.13 times in FY22. The decline is due to an increase in shareholder’s equity because of equity share issuance.

Debt service coverage ratio: During the year, the debt service coverage ratio declined to 1.52 times from 1.67 times in FY22.

Return on Capital Employed (ROCE): Adani Green’s ROCE declined to 3.74% in FY23 from 4.34% in FY22.

Adani Green Share Price History

Adani Green shares were listed on BSE and NSE on 18th June 2018 after its successful IPO, which was oversubscribed by 5.98 times. However, the stock debuted at ₹30, against its IPO price band of ₹100-125.

Despite losing at debut, Adani Green share price made a remarkable turnaround and has given a CAGR return of 99% in the last five years. The company has not paid dividends to shareholders or had any bonus issues after listing.

Despite the recent crash in Adani Green share price after the Hindenburg saga, it is one of the best-performing stocks in the market. The stock was trading around the ₹30 level in July 2018 and made an all-time high level of ₹3,050 on 19th April 2022, 100X in less than five years.

As of 14th July 2023, Adani Green has a market capitalization of ₹1,52,891 crores.

Adani Green Future Growth Potential

A SWOT analysis to better understand the Adani Green share price future growth potential.

Strengths

The group’s expertise in executing complex mega projects has helped it become one of India’s best-performing renewable energy companies. The company is reporting year-on-year healthy growth in net profits for the last five years.
Strong cash generation ability as entire power production is contracted through long-term power purchase agreements. AGEL has tied up with “Diversified Growth Capital” with a revolving facility of $1.64 billion that will fully fund its entire project pipeline
The company has managed to bring down the average debt cost of 11.1% in FY19 to 9.5% at the end of FY23.
Earning per share (EPS) more than doubled in FY23 at ₹5.41, from ₹2.41 in FY22
Favorable government policies and schemes on the promotion of renewable energy, like the PLI scheme on domestic solar PV manufacturing

Weakness

AGEL’s current average portfolio tariff is ₹2.98 per unit, which is lower than the national
the average power purchase cost of ₹3.85 per unit.
The company has huge debt on its book. At the end of FY23, gross debt stood at ₹47,274 crores. A sizeable portion of the company’s earnings goes toward interest payments.

Opportunities

AGEL is going to expand its total installed capacity by 5.5 times to 45,000 MW by 2030. PPAs with tariffs closer to the national average power purchase cost will improve profitability.

AGEL earned 3.9 million carbon credits in FY23, generating revenue of ₹157 crores. An increase in operational capacity will benefit the company in the long term.

Threats

The company has a low debt service coverage ratio, which makes it vulnerable to debt repayment risk. As per the company, the debt repayment risk is low, and the average tenure of the long-term debt is 7.3 years at the end of FY23.

AGEL faces strong competition from domestic and foreign companies that could moderate margins in case the tariff declines. The company is dependent on third-party vendors and manufacturers of silicon wafers and PV modules for solar projects. Any increase in the price of solar modules is difficult to pass on to customers and can impact project viability.

Faces increased scrutiny from regulators worldwide after the Hindenburg saga, impacting the company’s ability to raise capital from the market and hitting investors’ confidence.

Adani Green Share Price Analysis

Despite possessing a robust growth pipeline and a stable and predictable cash flow, the share price of Adani Green Energy Limited appears to be relatively expensive. As of July 14, 2023, the stock is trading at a high price-to-earnings (PE) multiple of 135 times and exhibits a low return on capital employed (ROCE) of 3.74%. These factors can make it challenging for the stock to reach high levels till the profitability margin and book value improve.

Adani Group stocks, including Adani Green, are susceptible to significant volatility and are currently trading at elevated valuations. In the medium to long term, a significant portion of the company’s profits may be allocated to servicing and repaying debt, which may mean a lower return on equity.

FAQs

How has Adani Green share price performed in the last 3 and 5 years?

As of 14th July 2023, Adani Green share price has given a CAGR return of 40% and 99% in the last three and five years, respectively. The all-time high Adani Green share price is ₹3,050.

What does Adani Green do?

Adani Green is India’s leading renewable energy company specializing in developing, constructing, owning, and maintaining large-scale grid-connected solar and wind power projects.

When was Adani Green started?

Adani Green was incorporated on 23rd January 2016, and in its initial days, it developed a 20 MW wind project in partnership with Inox Winds. Adani Green share was listed on 18th June 2018 on BSE and NSE.

July 21, 2023

Fundamental Analysis of Stocks

Vedanta Ltd Share Price: All You Need To Know

Introduction

If you search for the highest dividend-paying companies or dividend aristocrats, Vedanta Ltd. is sure to be at the top of your list. This metals and mining conglomerate, led by Billionaire Anil Agarwal, has managed to remain in the limelight for all types of reasons ranging from paying large dividends to making large acquisitions.

Recently, the company was in the news for trying to set up a semiconductor manufacturing business in India in partnership with Foxconn. In this article, we try to assess the current situation of Vedanta Ltd. and the impact on Vedanta Ltd share price.

Vedanta Ltd Overview

Vedanta Limited (VEDL), a subsidiary of Vedanta Resources Limited, is one of the world’s foremost natural resources conglomerates, with primary operations in zinc-lead-silver, iron ore, steel, copper, aluminum, power, nickel, and oil and gas.

As the market leader in most of these segments, Vedanta serves domestic and international demand for primary materials, thereby enabling resource sufficiency at scale. VEDL has a presence across India, UAE, East Asia, South Africa, Namibia, Liberia, Australia, and Ireland.

Following is a snapshot of the diversified structure of Vedanta and its shareholding in different subsidiary entities:

Vedanta Ltd Journey

Vedanta Limited has had a long and illustrious history. Here are some of the critical milestones in the company’s journey:

2001: Vedanta Limited acquired a 51% stake in BALCO (Bharat Aluminum Company Limited)
2002: Vedanta Limited acquired a 26% interest in Hindustan Zinc Limited
2003: Vedanta Limited became the first Indian company to be listed on LSE (London Stock Exchange)
2004: The Company acquired a 51% stake in Konkola Copper Mines
2006: Commissioned 50,000 TPA (tonnes per annum) lead smelter in India
2007: Listed on the NYSE (New York Stock Exchange) as the largest IPO by a non-US Company
2007: Acquired 51% stake in Sesa Goa Ltd
2010: Acquired Zinc assets in Namibia, Ireland, and South Africa, including Gamsberg, the largest undeveloped Zinc deposit in the world
2011: Completed acquisition of controlling stake in Cairn India, marking entry into Oil & Gas
2013: Sesa Goa is merged with Sterlite as a part of group consolidation
2013: Sesa Sterlite Ltd changed its name to Vedanta Ltd
2013: The merger of Vedanta Ltd and Cairn India has been approved by the shareholders of both companies
2017: Vedanta Ltd wholly owned subsidiary, Cairn India Holding Ltd, acquired a 51.63% stake in AvanStrate Inc. (ASI), a Japanese manufacturer of LCD glass substrate
2018: Acquired Electrosteel Steels Ltd under Insolvency and Bankruptcy Code (IBC)
2019: Acquired the Sindhudurg unit of Global Coke Ltd, which was under liquidation in the Bankruptcy Code (IBC)
2020: Acquired Ferro Alloys Corporation Ltd (FACOR) under the Corporate Insolvency Resolution Process (CIRP) of the Bankruptcy Code
2021: Acquired Bhachau and Khambhalia coke manufacturing units of Gujrat NRE Coke Ltd, which was under liquidation under the Bankruptcy code
2021: Acquired Nicomet, becoming the only Nickel producer in India

Vedanta Management Profile

Mr. Anil Agarwal is the Promoter of Vedanta Limited. He was appointed to the Board in May 2003 and has been the Executive Chairman of Vedanta Resource since March 2005. He became Non-Executive Chairman of Vedanta Limited in April 2020. He has over four decades of entrepreneurial and mining experience. Under his leadership, Vedanta has grown from an Indian domestic miner into a global natural resources group with entities listed in several markets. He is also a director of Sterlite Technologies Ltd, Conclave PTC Ltd, and Anil Agarwal Foundation.

Mr. Sunil Duggal is Vedanta Limited’s Chief Executive Officer (CEO). He was appointed to this position in August 2020. He has been the Whole-time Director of HZL (Hindustan Zinc Ltd.) since October 2015. He also led the Base Metal Group comprising Zinc, copper, and Iron ore businesses.

Mrs. Sonal Shrivastava is the Chief Financial Officer (CFO) of Vedanta Limited. She was appointed to this position in May 2023. As CFO, Sonal spearheads the group’s financial strategy and is responsible for accounting, tax, treasury, investor relations, financial planning, and analytics while driving digitalization and profitability. She holds a Bachelor’s degree in Chemical Engineering from BIT, Sindri, and a Master’s in Business administration from the Jamnalal Bajaj Institute of Management Studies.

Mrs. Madhu Srivastava is Vedanta Limited’s Chief Human Resources Officer (CHRO). She was appointed to this position in December 2018. She has an overall experience of 20 years across HR and Sales, Marketing, and Operations, spanning the FMCG, telecom, ITES, BFSI, and natural resources industries. She has completed her PGDM in marketing and sales from IIM, Ahmedabad.

Vedanta Shareholding Pattern

Vedanta Ltd Company Analysis

Vedanta is a diversified natural resources powerhouse. It is into the following business segments:

Aluminum: VEDL has the largest aluminum smelter in India with a capacity of ~2.3mt and holds a market share of 41% among primary aluminum producers in India. It is gradually strengthening its market position in the aluminum sector by increasing its share of value-added products (VAP). The current share of VAP is around 38%, which is expected to increase to 100% by FY25-26.

Zinc India: HZL, a 64.92% subsidiary of VEDL, is India’s largest integrated zinc producer and one of the lowest-cost producers of zinc globally. HZL commands a 77% market share in the primary zinc market in India and operates the world’s largest UG mine at Rampura Agucha. HZL has a strong focus on VAP, and the share of VAP is expected to increase to 23% in FY24 from 16% in FY23.

Zinc International: Zinc International has a strong presence in Africa with a total R&R (Reserves & Resources) of 659mt, and at the current rate, the mines’ lives are expected to be over 20 years. It is setting up a Zn concentrator plant and a smelter, which would take the MIC capacity to 600kt from 300kt.

Oil and Gas (Cairn India): Cairn India is India’s largest private-sector oil and gas producer, catering to 25% of India’s crude oil production. Cairn India drilled India’s first shale well in Rajasthan and is evaluating further opportunities to drill ‘low to medium’ or ‘medium to high’ reward exploration wells, further augmenting the company’s resources.

Power: VEDL is one of India’s largest private sector power producers and has a mega 1980mw power plant at Talwandi Sabo. It has a long-term PPA with state distribution companies in Punjab, Tamil Nadu, Kerala, Odisha, and Chhattisgarh. It has a total power portfolio of 9gw, with 63% of it for captive consumption.

Others: VEDL has a strong presence across steel (3mt capacity), FACOR (140kt Ferro chrome capacity), iron ore (one of the largest private sector merchant iron ore miners), and copper.

Vedanta Fundamental Analysis

VEDL is a metal and mining powerhouse with a presence across zinc, lead, silver, aluminum, oil and gas, copper, Ferro chrome, iron ore, power, and steel.

Aluminium, Zinc, and Oil & Gas are the three largest revenue-contributing segments for the company. The company recorded best-ever production numbers in some businesses segments in FY23 like:

Aluminum: Highest ever Aluminium production of 2,291 kt, up 1% with Jharsuguda ramp-up
Zinc India: Historic high refined metal production at 1,032 kt, up 7% YoY
Zinc International: Gamsberg achieved record production of 208 kt, up 22% YoY
Steel: Highest ever hot metal production of 1,376 kt
FACOR: Achieved all-time high ore production of 290 kt, up 16% YoY

(*Source: Vedanta Ltd. Annual Report FY23)

The company is in a capital-intensive sector, and to that extent, it has used significant debt capital to fund its expansion plans. Vedanta Resources (the parent company of Vedanta Ltd) has significant debt on its books. To adhere to its debt repayment commitments, Vedanta Resources relies heavily on dividend payouts by Vedanta Ltd., which depends on HZL.

Vedanta Ltd. declared record dividends in FY23, which helped Vedanta Resources meet its debt commitments; however, this led to HZL (Hindustan Zinc) taking debt on its book from being a cash-rich company earlier.

Vedanta Resources has adhered to all the debt repayment timelines and has already deleveraged USD 3.3b as of May’23 against its three-year USD 4b target. Vedanta Resources has a total debt of ~USD 6.4b, and it is expected to continue its deleveraging journey and adhere to its commitments.