Vedanta Share: Vedanta Limited is a well-known company. But in recent times, Vedanta’s troubles are not ending. The increasing burden on the parent company is also putting pressure on Vedanta. The situation has become such that many market leaders believe that if Vedanta Resources does not take any major steps, the company will not be able to repay its liabilities next year.
Experts’ confidence in the stock decreased
Along with this, the confidence of experts regarding the company’s stock has also reduced. Kotak Institutional’s report has advised to send Vedanta’s stock. Whereas CLSA has already reduced its target regarding stock. However, the company’s rating has been upgraded. Let us tell you that Kotak’s report is before the recent news of the company. The CLSA report is dated September 30.
Let us tell you that in Kotak’s report, while advising to sell the stock, its fair value has been increased to 200. The stock is currently at the level of 222, which means a decline of about 10% is expected from here.
The special thing is that in the last session itself the stock had seen a rise of about 7%. When Hindustan Zinc made the announcement regarding restructuring. For information, let us tell you that Vedanta Limited has 64% stake in Hindustan Zinc.
What are the challenges facing the company?
Kotak’s report said that Vedanta Resources is in debt and the funding gap of $ 3 billion in FY 2025 is a matter of concern. According to the report, the company has made arrangements for the funding gap for the current financial year. It was further said that since there is no expectation of big dividends from the group companies, the company may have to take other steps to raise funds. Which may include stake sale or asset sale. There are fears of decline in earnings due to weak commodity cycle and project delays.
What is special in CLS report?
CLSA report said that Vedanta has decided to divide its business into 6 companies. This will not have any impact on business in the short term, however, this step will further help in bringing investment in different companies and will help in reducing the debt burden. However, for re-rating the company will have to focus on improving business.
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