ICICI Securities recommended hold rating on Vedanta with a target price of Rs 110 in its research report dated June 08, 2020.
ICICI Securities research report on Vedanta
Vedanta’s Q4FY20 EBITDA of Rs45.5bn, while in-line, has largely taken support of a superior cost performance in aluminium operations. Operating performance surprised in aluminium, power (TSPL’s provisional performance based on availability?) and steel. Cairn and Zinc International disappointed – Cairn not only on account of an operational miss which seems largely on account of elevated costs as volumes were lower, but also as Vedanta yet again decided to undertake a substantial write-down of Rs173bn in oil and gas assets. We attribute 50% of the valuation to book and hence, any large write-down impacts our valuation as well.
Outlook
Vedanta could generate FCF of Rs70bn and reduce net debt by ~Rs60bn in FY20. We maintain HOLD with a revised target price of Rs110 (Rs130 earlier).
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Read More
