Vedanta – Deleveraging, Project Execution Focus: Axis Securities

Axis Securities Report

We visited Vedanta Ltd.’s world-class assets in Odisha and Rajasthan and saw operations of its-

1. Aluminium smelter which is the world’s largest single-location smelter located at Jharsuguda, Odisha placed at 1st quartile of the cost curve,

2. SK Mine at Dariba, Rajasthan, which is one of the largest zinc-lead producing assets globally and world’s second-largest silver producing mine, and lastly,

3. Its oil and gas operations at Cairn India, which included Mangala well pads, Central polymer facility, and Mangala processing terminal visit.

Vedanta Resources Ltd. has de-levered its balance sheet by $3.7 billion to $6.0 billion in the last two years. In Jan-Feb-24, the company managed to reprofile and smoothen its near-term bond maturities of ~$4 billion via a successful liability management exercise. Since Feb, 01 2024, the stock has outperformed the broader index and has delivered a 64% return to date post the liability management exercise.

The outperformance was also aided by the recent rally of its underlying commodities, mainly Aluminium, Zinc, and Silver prices.

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