Vedanta Limited

Basic Materials — Other Industrial Metals & Mining · NSE

₹246.10+₹0.20 (+0.08%)

DalalBaazaar Score

74 / 100

🟢 Good

Verdict

REASONABLE

Risk

Low

No individual risk factor stands out on this snapshot.

In simple words: Strong business and financial position, but sales are shrinking. Whether sales start growing again is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:00 pm

Understanding the Business

Company site ↗

The 60-second version of Vedanta Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Vedanta Limited, a diversified natural resources company, explores, extracts, and processes minerals, and oil and gas in India, Europe, China, the United States, Mexico, and internationally.

IndustryOther Industrial Metals & Mining

SectorBasic Materials

Employees16,090

Annual revenue₹76,672 Cr

How does it make money?

Turns over ₹76,672 Cr a year. Of every ₹100 of sales, about ₹23 reaches shareholders as profit, with ₹38 left at the operating level before interest, tax and depreciation. Each of its 16,090 employees supports ₹4.77 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹4.77 Cr

Who are its competitors?

The closest listed comparisons in its industry are HINDALCO INDUSTRIES LTD, TATA STEEL LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 21.3% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE12.0%

What is the outlook?

9 analysts covering the stock expect revenue to grow about 2.6% and earnings to fall about 6.6% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+2.6%

Est. earnings growth-6.6%

Analysts9

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -47% while net margin moved +212% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect-47%

Margin effect+212%

DalalBaazaar Score

74/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 19.2% a year
✓ Profit CAGR of 18.0% is above 15%
✗ Latest-year revenue growth of -37.3% is below the longer-term trend — momentum is fading

Quality vs. Valuation

Company Quality

75/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

85/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

10.4x

3Y Median

14.0x

40 monthly readings · mean 19.5x · range 5.6x–45.2x

Sector Median

16.1x

median of 2 sector peers

🟢Current valuation is approximately 26% below its 3y median of 14.0x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 36% below the peer median of 16.1x.

vs. its own history

Cheap

14.0x median over 40 months · -26%

vs. sector peers

Cheap

16.1x median of 2 peers · -36%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

4.2x

PEG

0.57

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 25.4% to 38.1% over 3 years.
Debt is being paid down
Total debt is down 58% over 3 years.
Return on equity is rising
ROE has improved from 26.8% to 42.6%.
High return on capital employed
ROCE of 21.3% is the mark of a business that converts capital into profit efficiently.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 24.1% to 21.3% — often a sign of competition or overexpansion.

Red Flags

No automated checks triggered

None of the automated financial checks below were triggered on the years of data available. That is not the same as a clean bill of health — see what could not be checked.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 21.3% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 25.4% to 38.1%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 58% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 26% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 36% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 36%✓ 38.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✓ ₹18,623 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 1.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 18%✓ 21.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Interest cover stays above 4x✓ 7.8x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

10 / 12 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✗ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

8 good · 2 neutral · 1 weak

Market Cap

₹96,097 Cr

Mid Cap

Mid-sized — more growth headroom, but sharper swings than large caps

P/E (Trailing)

10.4x

Cheap

Cheap against the generic band

P/B Ratio

1.94x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹23.77

Profitable

Profitable on a per-share basis

ROE

42.6%

Strong

Strong capital efficiency

ROCE

21.3%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.48x

Low

Conservative leverage

Revenue Growth (YoY)

-37.3%

Shrinking

Sales are contracting

Profit Growth (YoY)

72.2%

Healthy

Profits growing at a healthy clip

Dividend Yield

6.50%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

₹18,623 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

6.9x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

31.2%

Good

Healthy core-business profitability

Net Margin

23.2%

Good

Strong bottom-line conversion

Current Ratio

1.32

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.36

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

259.4 / 266.9

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

36.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1.45 L Cr	₹1.42 L Cr	₹61,605 Cr	₹76,672 Cr	-19.2%
EBITDA	₹36,945 Cr	₹36,675 Cr	₹26,381 Cr	₹29,176 Cr	-7.6%
EBITDA Margin	25.4%	25.9%	42.8%	38.1%	—
PAT (Net Profit)	₹10,574 Cr	₹4,239 Cr	₹14,988 Cr	₹17,391 Cr	+18.0%
EPS	₹28.32	₹11.33	₹38.65	₹44.21	+16.0%
ROE	26.8%	13.8%	39.1%	42.6%	—
ROCE	24.1%	25.7%	11.8%	21.3%	—
Total Debt	₹66,618 Cr	₹72,770 Cr	₹75,185 Cr	₹27,844 Cr	-25.2%
Free Cash Flow	₹19,278 Cr	₹18,902 Cr	₹22,557 Cr	₹18,623 Cr	-1.1%

🔴 Revenue has shrunk at 19.2% a year over 3 years.

🔴 EBITDA has shrunk at 7.6% a year over 3 years.

🟢 EBITDA Margin has risen from 25.4% to 38.1% over 3 years (+12.6 pts).

🟢 PAT (Net Profit) has grown at 18.0% a year over 3 years.

🟢 EPS has grown at 16.0% a year over 3 years.

🟢 ROE has risen from 26.8% to 42.6% over 3 years (+15.8 pts).

🔴 ROCE has fallen from 24.1% to 21.3% over 3 years (-2.8 pts).

🟢 Total Debt has shrunk at 25.2% a year over 3 years.

🟡 Free Cash Flow has been broadly flat over 3 years (-1.1% a year).

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2.33 L Cr

Total Liabilities

₹1.65 L Cr

Cash & Equivalents

₹1,370 Cr

Operating Cash Flow

₹39,499 Cr

Capex

-₹20,876 Cr

Shareholding (proxy)

Institutional Holding

18.0%

Insider Holding

57.1%

Corporate Actions

Next Earnings

29 Oct 2026

Dividend Rate

₹16

Ex-Dividend Date

14 Oct 2026

Analyst Consensus

Recommendations

9 Buy · 2 Hold · 1 Sell

Target Price (Mean)

₹313.89

+27.5% vs CMP

Target Range

₹235 – ₹350

Peer Comparison

Company	P/E	ROE
HINDALCO INDUSTRIES LTD	12.3x	12.0%
TATA STEEL LIMITED	19.8x	10.8%

Recent News

1 positive2 mixed3 general

Vedanta Iron & Steel promoter shares encumbered for US$ 2.25 bn facility

scanx.trade, 18 Oct

Vedanta Iron & Steel Share Price: 6 Upper Circuits, 28% Jump: Why Investors Are Chasing Vedanta Demerger Stock

Goodreturns, 17 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Stocks to buy for long term: Vedanta Iron and Steel, Vedanta Oil and Gas or Vedanta Power: Which is better? Target, SL

Livemint, 26 Sept

Vedanta Approves Interim Dividend Of Rs 5; Check Record Date

NDTV Profit, 08 OctCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

VEDANTA POWER LTD. Stock/Share price , NSE/BSE Forecast News and Live Quotes

Equitymaster, 16 Oct

Stocks To Buy: Kotak sees shares of this Vedanta unit to jump 31% from current levels - CNBC TV18

LinkedIn, 17 SeptPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Watch Items

Revenue growth is negative (-37.3%) on the latest reported period — check if this is one-off or a trend.
Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Profitability · Valuation

MiddlingGrowth · Risk

Points for each in the Score ↑

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last.

All 5 tripwires holding · see Key things to watch ↑