Tag Energy Transition

Vedanta Stock Analysis
Vedanta’s Growth Strategy & Market Outlook: From Metals to Green Energy

Business and Industry Overview:  

Vedanta Ltd. is a big company from India. It works with natural resources. It does many types of work. It finds, takes out, and processes minerals and oil & gas. It sells these products in India and other countries. It makes and sells many materials. These are zinc, lead, silver, copper, aluminium, iron ore, and oil & gas. These are used in buildings, machines, transport, and electronic items. These things are important for daily life and India’s growth. Vedanta also has other businesses. It makes electricity in big power plants. It makes steel in India. It runs ports in India. It also makes glass parts in South Korea and Taiwan. These glass parts are used in TVs, phones, and computers. It works in many countries. It is in India, South Africa, Namibia, Ireland, Liberia, and the UAE. Most of the company’s money comes from India. About 65% of the total money comes from India. Malaysia gives 9%, China gives 3%, UAE gives 1%, and other countries give 22%. Vedanta also makes oil and gas. These are used for fuel and energy. It makes electricity for factories and big businesses. These help machines work and vehicles run. Vedanta uses new machines and smart ideas. This helps the company work faster and better. It also helps reduce waste. This saves money. The company earns more profit this way. Vedanta follows good rules. It wants to be fair and honest in business. It wants to treat people well. But the company has a big problem. It has taken a lot of loans. This means it has a lot of debt. This is not good. It can create trouble for the future. To fix this, Vedanta has a plan. It wants to break into smaller companies. Each small company will handle one type of business. One company will do aluminium. One will do oil and gas. One will do power. This will help each company grow better. It will also bring new investors. Vedanta also wants to protect nature. It is working on green energy. This includes solar power and wind power. These do not cause pollution. Vedanta wants to stop pollution. It wants to become net-zero by 2050. This means it will not add bad gases to the air. Vedanta is very important for India. It gives raw materials to many industries. These industries make products, build things, and create jobs. Vedanta helps India grow. It helps India become strong and self-reliant.   

Latest Stock News: 

In the fourth quarter of FY25, Vedanta did well in metals but not in oil and gas. The company made more aluminium, zinc, iron ore, and steel. But it produced less oil and gas. Aluminium production was 6,03,000 tonnes. This was 1% more than the same time last year. It is a small increase but still good. In the Zinc India division, Vedanta made 3,100,000 tonnes of mined metal. This was 4% more than last year. This happened because the metal in the mines was of better quality, and the machines worked better. In the Zinc International division, Vedanta made 50,000 tonnes of mined metal. This was a big increase of 52% from last year. This shows good growth in other countries too. But oil and gas production is less, which is not a good sign. So, metal production went up, but oil and gas went down. Here is the same explanation in easier English, with small and simple sentences, and no complex words or sentences, while keeping all the important details: 

Vedanta’s chairman, Anil Agarwal, said that India is behind China in shipping. He said that China has more than 5,000 big ships. But India has less than 500 ships. These ships are used to carry goods for trade. This is a very big difference. He also said that China controls most of the world’s sea trade. About 98% of the world’s trade ships are owned by Chinese companies or are made in China. This means that China is very strong in global shipping. Anil Agarwal said that India is surrounded by the sea on three sides. India also has a rich history in sea trade. But now, India is only number 16 in the world for shipping power. India wants to improve. India wants to be in the top 10 shipbuilding countries by 2030.  India’s ports are important. They handle 95% of trade by volume and 70% by value. In the year 2024, Indian ports moved 819.22 million tonnes of goods. This is 4.45% more than last year. Anil Agarwal said that India must do better. He said that the government and private companies should work together. Everyone should help. He used a shipping phrase — “all hands on deck.” This means everyone must join and support. He said India should become strong in shipping and not depend too much on China. 

Potentials: 

Vedanta has many plans for the future. It wants to grow. It also wants to reduce its loans. Vedanta will break into smaller companies. Each small company will do one type of work. One company will do aluminium. One will do oil and gas. Others will do power, steel, or mining. This will help each company grow better. It will also help Vedanta get more money from investors. Vedanta also wants to use green energy. It will use solar and wind energy. These are clean energy sources. The company wants to stop pollution. Vedanta wants to become net-zero by 2050. This means it will not add dirty gas to the air. The company will also use better machines and smart tools. This will save money and energy. Vedanta will also put money in technology. It will invest $500 million in AvanStrate Inc. This company makes display glass. Display glass is used in phones, TVs, laptops, and car screens. Vedanta owns 98% of AvanStrate. This money will help AvanStrate grow. It will also help the company make better glass. The company will do more research. It will make new glass for many uses. These include chips (semiconductors), car screens, biotech tools, and other products. 

AvanStrate works in Taiwan, South Korea, and Japan. It wants to work with new partners. These partners will help make better glass. Vedanta says this will help it grow in future areas. These areas are energy, technology, and special materials. Vedanta also wants to use automation and clean methods. It wants to be good to people and nature. It wants to follow clean and fair business rules. AvanStrate’s head is Akarsh Hebbar. He said the company will become a top name in display glass. The market for this glass is $42 billion now. It may grow to $60 billion by 2030. Vedanta says AvanStrate is ready to meet this demand. It will be an important part of the world market. 

In short, Vedanta wants to grow in metals, green energy, and technology. It is taking many steps for a strong and clean future. 

Analyst Insights: 

  • Market capitalisation: ₹ 1,56,983 Cr. 
  • Current Price: ₹ 401 
  • 52-Week High/Low: ₹ 527 / 317 
  • P/E Ratio: 13.2 
  • Dividend Yield: 10.8%
  • Return on Capital Employed (ROCE): 20.9% 
  • Return on Equity (ROE): 10.5% 

Vedanta Ltd is a big Indian company. It works in many areas. It makes metals, oil and gas, power, and also runs ports. It makes aluminium, copper, zinc, silver, iron, and steel. These are raw materials. Many industries use them. For example, aluminium is used in cars and kitchen items. Copper is used in wires. Zinc is used to stop rust. Oil and gas are used for fuel and energy. Most of the company’s money comes from aluminium. It gives 38% of the total money. After that, zinc and oil & gas give the next highest income. Vedanta works mainly in India. But it also works in South Africa, UAE, Taiwan, and Namibia. This helps the company earn money from many places. Vedanta gives high dividends. This means it gives money to people who invest in the company. It earns good profit. It is strong in the mining and metal market. Many investors like this company. But there are some problems. Vedanta has a lot of debt. It has taken out big loans. Its parent group also has loans. The promoter group has pledged 100% shares. This means they used their shares to get money. This is risky. Also, the promoter’s share is going down. This may be a worry for some people. In short, Vedanta is a strong company. It gives good profit and money to investors. But it also has some risks like high debt and pledged shares. Investors should think about both good and bad points. 

Adani Total Gas
Adani Total Gas : Assessing Revenue Growth and Valuation Metrics

Company Overview 

Adani Total Gas Limited (ATGL), a joint venture between the Adani Group and TotalEnergies both owning 37.4 percent equity shares in the company, is one of the big players in CGD in India. The company’s primary operations include transportation gas supply and supply of natural gas for domestic, commercial and industrial purposes. ATGL commenced operations in 2004 and has grown to serve 34 districts while having equity stakes in a further 19 districts through a joint venture with the Indian Oil Corporation known as Indian Oil Adani Gas Pvt Ltd (IOAGPL). The cumulative distribution of Compressed Natural Gas (CNG) and Piped Natural Gas (PNG) with the active distribution of 577 CNG stations within the network by October 2024 remain the core businesses within its operations contributing positively to its operational finance. Consistent with its promise to sustainability, the company has diversified its operations into innovative energy solutions through its subsidiary Adani TotalEnergies E-Mobility Limited, focused on biogas, LNG, green hydrogen and electric vehicle infrastructure. Notwithstanding recent controversies sparked off by the allegations involving its parent company concerning corporate governance, ATGL rests the arguments on premises that the concerns surrounding their investment will lead to growth and therefore innovation which it has funding of $375 million sourced internationally to expand its distribution network across 13 states that is in line with India’s clean energy vision. 

Returns Summary 

YTD 1 Month 6 Month 1 Year 2 Year 3 Year 5 Year 
-22.46% -5.54% -13.68% -22.46% -79.26% -55.29% 371.14% 

3Years Return: SBI Ltd. v/s Nifty 50 

Shareholding Pattern 

Key Metrics 

Metrics – 
Mkt Cap (INR Cr):              83,230 Cr. 
52-week H/L:                      1198/546 
PE Ratio:                             120.81 
Dividend yield:                   0.03% 
ROCE:                                21.26% 
P/B:                                    21.5 
NSE Code:                          ATGL 

Financial Trends 

Year Sales (₹ Cr) Operating Profit (₹ Cr) OPM (%) Net Profit (₹ Cr) EPS (₹) Reserves (₹ Cr) Borrowings (₹ Cr) Fixed Assets (₹ Cr) Debt/Equity 
Mar-18 1,374 366 27% 162 6.31 759 1,345 897 1.77 
Mar-19 1,719 455 26% 229 2.08 992 394 980 0.4 
Mar-20 1,875 595 32% 436 3.97 1,361 428 1,198 0.31 
Mar-21 1,696 704 42% 463 4.21 1,824 529 1,379 0.29 
Mar-22 3,038 773 25% 509 4.63 2,306 1,035 1,733 0.45 
Mar-23 4,378 870 20% 546 4.97 2,831 1,422 2,335 0.5 
Mar-24 4,475 1,104 25% 668 6.07 3,470 1,557 3,174 0.45 

Peer Comparison 

Company Price (₹) Market Cap (₹ Cr) P/B P/E EPS (₹) ROE (%) ROCE (%) P/S EV/EBITDA 
Adani Total Gas 761.05 83,701.05 21.5 120.81 6.3 20.09 21.26 18.72 69.58 
Gujarat Gas 498.7 34,330.02 4.32 27.1 18.4 15.56 21.65 2.19 15 
Indraprastha Gas 415.65 29,095.53 3.1 18.1 22.96 22.36 29.86 2.08 10.55 
Gujarat State Petronet 361.9 20,418.81 1.93 18.16 19.93 13.15 16.86 10.05 11.88 
Mahanagar Gas 1,284.40 12,687.02 2.29 11.04 116.37 27.79 37.6 2.03 6.71 
Confidence Futuristic 89.7 224.43 1.6 83.78 1.07 1.86 2.63 44.36 58.09 

Latest News

Adani Total Gas has reported a 7.2% revenue growth over the past year and an impressive 111% growth over three years. Despite industry-wide challenges, including a projected 5.1% revenue decline, the company has maintained resilience, justifying its elevated price-to-sales (P/S) ratio.

Investors remain optimistic about its ability to outperform peers, but future growth hinges on overcoming challenges like declining natural gas allocations. With revenue growth exceeding industry trends, Adani Total Gas continues to attract attention, though its ability to sustain this momentum will be crucial.

Stock Analysis 

On December 31 2024 Adani Total Gas Ltd. Share price close in a market fall-down by 3.28% and made an intraday low at 726.6. This fall came on the heels of four consecutive days of gain and was in stark contrast to 2.46 percent fall (over the past month) with the Sensex. One of the major reasons for the drop is the decrease in APM-priced domestic gas allocation. In this regard GAIL India Limited vide letter dated November 15 2024, communicated to ATGL, a reduction in gas allocation by 13% effective from November 16 2024. Its relatively decrease affect all the City Gas Distribution CGD sector. It also expected to speak negatively of the firm about profits. Noting revenue, the last push could be rationalized on a standalone basis by ATGL is basically growing revenue in some form of consistent manner. This may lead investors speculate that revenues will come through hard and glaze in the coming period and allow sales annual growth. According to the consensus of analysts, the stock’s target price is ₹1,085.00, which means that it can potentially gain by around 59.72% from the last closing price of ₹679.30.   The recent cuts on gas allocation and potential cuts on profitability should sway investors and affect stock performance in the near term, however. How quickly is still dependent on how ATGL manages these issues and tailors its approach to mitigate the effects of declining natural gas supplies. It is up to investors to closely watch and see what operational improvements ATGL makes on top of market developments to determine when a turnaround in the company’ stock performance will occur.  

Investors are advised to keep their eyes on the companies’ financials and strategic decisions which will provide further direction as to take the appropriate action in short term. However, the future from long term perspective looks attractive.