7 May 2019
4QFY19
Results Update | Sector:Metals
Vedanta
Sell
BSE SENSEX
38,277
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Free float (%)
S&P CNX
11,498
VEDL IN
3,717
607.4 / 8.7
Capital allocation concerns remain; Maintain Sell
290 / 146
VEDL’s 4QFY19 EBITDA grew 9% QoQ to INR61.3b (our estimate: INR54.3b).
-13/-31/-51
Lower cost of production (CoP) in aluminum and zinc international was the
3074
key driver of its growth and better-than-estimated performance. Other
49.9
CMP: INR163
TP: INR144(-12%)
Lower CoP in aluminum and zinc-int drives beat
Financials & Valuations (INR b)
Y/E Mar
2019 2020E
Net Sales
920
910
EBITDA
189.1
222.3
PAT
67.5
61.9
EPS (INR)
18.1
16.6
Gr. (%)
-11.0
-8.2
BV/Sh (INR)
167.5
172.2
RoE (%)
10.7
9.8
RoCE (%)
12.3
12.9
P/E (x)
9.0
9.8
P/BV (x)
1.0
0.9
2021E
947
232.3
64.7
17.4
4.5
182.0
9.8
12.9
9.4
0.9
Estimate change
TP change
Rating change
income increased 16% QoQ (+64% YoY) to INR16.3b (our estimate: INR2.9b),
led by a mark-to-market gain on the structured investment in Anglo
American. Adj. PAT grew 15% QoQ to INR26.1b (our estimate: INR6.7b).
Reported aluminum CoP was down USD249/t QoQ to USD1,776/t due to
lower alumina and coal cost. Reported EBITDA/t increased by USD74 QoQ to
USD131.
Zinc-int CoP was down USD269/t QoQ to USD2,540/t owing to higher
volumes (+42% QoQ). Gamsberg started commercial production during the
quarter.
Iron ore EBITDA doubled QoQ to INR2.4b, led by higher volumes in
Karnataka. Electrosteel’s EBITDA increased 35% QoQ to INR3.4b, driven by a
35% QoQ increase in sales volume. EBITDA/t was flat QoQ at INR8,597/t.
For FY19, EBITDA was down by 8% YoY, while adj. PAT declined ~11% YoY.
VEDL has paid ~USD270m for the structured investment in Anglo-America
PLC in a related-party transaction with its holding company. The total
investment is ~USD500m; the balance has to be paid in the next 4-5
quarters. It has recognized a mark-to-market gain of ~USD150m on the
investment. As argued earlier, although this transaction appears at an arm’s
length, the counter-party risk is high because the parent drives its value
from VEDL itself and is highly leveraged. Investors are concerned about
future capital allocation.
We have raised PAT estimate by 3-4% for FY20/21 to factor in lower interest
cost. We value the O&G and zinc-int businesses at a lower multiple to
account for the concerns around capital allocation. Sum-of-the-parts
valuation is INR144/share. Maintain
Sell.
INR million
1Q
222,060
21.4
61,150
25.5
13,590
17,960
4,000
33,600
33,600
11,120
33.1
22,480
7,150
15,330
0.5
FY19
vs Est.
2Q
3Q
4Q
FY18
FY19
4QE
%
227,050 236,690 234,680 918,660 920,480 206,053
14
5.2
-2.8
-15.1
27.2
0.2
-25.4
52,080 56,450 61,350 251,430 231,030 54,306
13
-8.1
-16.5
-21.7
17.9
-8.1
-30.7
15,710 13,580 14,010 57,060 56,890 14,745
-5
19,310 22,070 22,580 60,440 81,920 20,155
12
5,920 13,980 16,280 34,970 40,180
2,922
457
22,980 34,780 41,040 168,900 132,400 22,328
84
26,180 34,780 41,040 177,370 135,600 22,328
84
7,180 11,460
8,860 55,540 38,620
7,643
16
27.4
32.9
21.6
31.3
28.5
34.2
19,000 23,320 32,180 121,830 96,980 14,684
119
5,570
7,580
6,030 34,190 26,330
7,975
-24
10,230 15,740 26,150 79,170 67,450
6,702
290
-46.3
-28.8
14.9
40.7
-14.8
-70.6
Quarterly Performance (Consolidated)
Y/E March
Net Sales
Change (YoY %)
EBITDA
Change (YoY %)
Finance cost
DD&A
Other Income
PBT (before EO item)
PBT (after EO item)
Total Tax
% Tax
Reported PAT
Minority interest
Adjusted PAT
Change (YoY %)
1Q
182,850
26.7
48,740
41.7
15,920
13,860
10,550
29,510
29,510
6,810
23.1
22,700
7,450
15,250
148.0
FY18
2Q
3Q
4Q
215,900 243,610 276,300
36.1
25.5
22.7
56,690 67,630 78,370
21.5
12.8
6.6
13,840 13,060 14,240
14,260 15,490 16,830
8,760
5,730
9,930
37,350 44,810 57,230
39,210 43,230 65,420
9,350 13,640 25,740
23.8
31.6
39.3
29,860 29,590 39,680
8,950
9,060
8,730
19,050 22,110 22,760
52.1
18.5
49.3
Sanjay Jain – Research Analyst
(SanjayJain@motilaloswal.com@MotilalOswal.com); +91 22 6129 1523
Aniket Mittal – Research Analyst
(Aniket.Mittal@MotilalOswal.com); +91 22 61291572
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
 Motilal Oswal Financial Services
Vedanta
Exhibit 1: EBITDA by businesses – INR million
Y/E March
EBITDA
Copper
Aluminum
Iron ore
Power
Zinc-India
Zinc-Int
Oil&Gas
Steel
Others
Change (YoY %)
As % of Net Sales
1Q
48,740
2,130
5,280
400
1,100
23,840
3,210
13,850
FY18
2Q
3Q
56,690 67,630
3,920 2,970
4,570 6,100
-40 2,310
3,660 5,950
30,240 32,440
3,890 4,460
11,760 13,590
-190
12.8
27.8
4Q
78,370
4,070
13,100
1,930
5,970
36,200
2,590
15,090
-580
6.6
28.4
1Q
61,150
-870
12,590
1,630
4,250
27,130
850
18,520
-2,950
25.5
27.5
FY19
2Q
3Q
52,080 56,450
20
-750
3,990
-880
980 1,010
3,780 3,640
23,340 28,380
160 2,060
20,260 19,730
1,680 2,490
-2,130
770
-8.1 -16.5
22.9
23.8
FY18
FY19 FY20E
4QE
54,306
-152
1,404
1,486
3,708
25,811
1,306
18,510
2,233
-30.7
26.4
Source: MOFSL
4Q
61,350 251,430 231,030 271,197
-690 13,090 -2,290 -2,721
3,970 29,050 19,670 21,205
2,400
4,600
6,020 4,901
3,600 16,680 15,270 14,479
27,890 122,720 106,740 122,574
3,910 14,150
6,980 23,288
18,050 54,290 76,560 77,383
3,370
7,540 10,088
-1,150 -3,150 -5,460
0
-21.7
17.9
-8.1
17.4
26.1
27.4
25.1
29.8
vs Est.
%
13
355
183
62
-3
8
199
-2
51
-1,070 -1,310
41.7
21.5
26.7
26.3
Exhibit 2: SOTP valuation – INR billion
EBITDA
EV
Enterprise Value
FY18 FY19 FY20E EBITDA (x) FY18 FY19 FY20E
VEDL (ex HZL)
Copper
Aluminum
Iron ore
Steel
Power(TSPL)
Power(other)
Zinc-Int
Oil&Gas
Sub. Tot.
Less: Net Debt
Equity Value
Hind. Zinc
HZL
Less: Net Debt
Equity Value
INR/share (HZL)
VEDL
HZL@64.9%
VEDL (ex HZL)
Equity Value
INR/share
13
29
5
13
4
14
54
132
-2
20
6
8
13
3
7
77
130
-3
21
5
10
12
2
23
77
149
6.5
6.5
6.5
6.5
DCF
6.5
3.25
1.25
3.3
Metal
Volumes (kt/kbpd)
FY18 FY19 FY20E
88
1,915
3,900
950
Prices (USD/t or bbl)
FY18 FY19 FY20E
6,447
2,045
68
6,343
2,038
69
584
6,200
1,900
56
492
189
30
87
24
46
164
539
610
-70
128
39
49
80
17
23
96
431
586
-155
138
32
66
76
15
76
97
499
619
-120
Copper
403
Aluminum 1,646
Iron ore 7,500
Steel
2,006
4,400
1,648
Zinc
Oil-kbpd
USD/INR
172
186
141
189
290
205
3,048
58
64.5
2,751
71
69.9
2,700
60
73.1
123
107
123
6.5
798
694
797
-222 -170 -212
1,020 864 1,009
241
204
239
Equity Value
662
560
655
-70
-155 -120
591
406
535
159
109
144
Zinc
Lead
Silver
793
169
555
694
197
679
783
225
710
3,048
2,378
39
2,751
2,123
38
2,700
2,000
38
Source: MOFSL
Exhibit 3: Distribution of EBITDA - %
Ali
9% Power
6%
Cu
-1%
O&G
33%
Iron & Steel
7%
Source: MOFSL
Exhibit 4: Distribution of enterprise value - %
Ali
14%
Cu
0%
Zinc
58%
Power
9%
O&G
9%
Iron & Steel
10%
Zinc
44%
Source: MOFSL
7 May 2019
2
 Motilal Oswal Financial Services
Vedanta
Conference call and other segmental highlights
Aluminum
Cost of production for aluminum decreased due to higher local bauxite sourcing
and continued availability of linkage coal. Local bauxite sourcing increased from
40% in 3Q to 53% in 4QFY19. Imported alumina prices were also lower.
Vedanta expects aluminum hot metal CoP at USD1,725-1,775/t in FY20. It plans
to ramp up alumina refinery capacity to ~3mtpa in the next 18-24months, in line
with availability of local bauxite.
Exhibit 5: Aluminum – INR million
Aluminum (USD/t)
Alumina (USD/t)
USD/INR
Revenue
Production (kt) ex trial
Jharsuguda
Balco
Trial
Sales (kt) incl. trial
NSR (USD/t)
Premium over LME (%)
EBITDA
EBITDA/t
CoP (USD/ton) -Reported
Jharsuguda
Balco
Alumina
1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19
FY18
FY19
FY20E
1,909
2,009
2,102
2,159
2,259
2,058
1,973
1,861
2,045
2,038
1,900
295
331
450
450
400
500
500
387
382
447
400
64.5
64.3
64.8
64.4
66.8
70.2
72.1
70.4
64.5
69.9
73.1
45,500 52,120 65,140 71,580 73,940 78,880 77,080 65,470 234,340 295,370 312,570
318
383
427
468
469
477
489
468
1,596
1,903
2,006
193
241
285
325
328
335
344
325
1,044
1,332
1,430
125
142
142
143
141
142
145
143
552
571
576
34
16
18
9
12
18
14
14
77
58
338
380
441
487
465
489
494
467
1,646
1,915
2,006
2,088
2,133
2,279
2,284
2,380
2,356
2,186
1,988
2,277
2,221
2,132
9.4
6.2
8.4
5.8
5.4
14.5
10.8
6.8
11.4
9.0
12.2
5,280
4,570
6,100 13,100 12,590
3,990
-880
3,970 29,050 19,670 21,205
242
187
213
418
405
119
-25
121
282
148
145
1,727
1,857
1,945
1,970
1,934
2,018
2,025
1,776
1,887
1,692
1,853
1,919
1,955
1,934
2,022
2,015
1,771
1,867
1,780
1,865
2,000
2,005
1,934
2,007
2,045
1,789
1,923
312
331
327
326
341
358
308
290
326
Source: MOFSL
Oil and Gas
FY19 oil production at 189kboepd was lower than its earlier guidance as the
company had to go much deeper for reassurances in successful extraction of oil.
The company expects volumes to ramp up with an exit run-rate of 270kboepd
for FY20. On an average, Vedanta expects volumes to be at 200-220kboepd for
FY20. It targets to reach a run-rate of 210-220kboepd in 2QFY20 and 250-
260kboepd in 3QFY20.
Exhibit 6: Oil and Gas segment – INR million
Y/E March
Brent crude - USD/bbl
Gross volumes - kbpd
Rajasthan
Ravva
Cambay
Working interest - kbpd
Raj. realn. - USD/bbl
Dis. to Brent - %
Revenue - INR m
EBITDA - INR m
1Q
49.6
187
159.4
18.4
9.5
119.5
44.9
9.5
22,750
13,850
FY18
2Q
3Q
52.1
61.3
181
184
153.2
157.1
17.3
16.9
10.5
10.2
115.3
117.8
45.1
53.0
13.4
13.5
20,990 24,130
11,760 13,590
4Q
66.9
190
162.4
16.3
11.5
121.9
59.0
11.8
27,490
15,090
1Q
74.4
195
164.0
14.2
16.7
124.7
67.2
9.7
32,190
18,520
FY19
2Q
3Q
75.2
68.8
186
187
155.2
151.6
13.5
16.8
17.2
18.8
118.6
117.4
69.5
65.1
7.6
5.4
34,790 33,500
20,260 19,730
FY18
4Q
63.7
187
152.8
15.1
19.2
118.0
62.1
2.5
31,750
18,050
57.8
186
158.0
17.2
10.4
118.6
52.3
9.5
95,360
54,290
FY19
FY20E
70.5
60.0
189
205
155.9
172.9
14.9
13.3
18.0
18.7
119.7
131.5
66.1
55.2
6.3
8.0
132,230 131,054
76,560 77,383
Source: MOFSL
7 May 2019
3
 Motilal Oswal Financial Services
Vedanta
Zinc International
Gamsberg began commercial production in 4Q.
VEDL expects Gamsberg production to increase to 180-200kt in FY20.
Production from Black mountain mine and Skorpion to be at ~170kt in FY20.
The company is targeting CoP for Gamsberg at ~USD1,000/t in FY20.
Exhibit 7: Zinc international segment – INR million
Zinc - USD/t
Lead - USD/t
USD/INR
Production (kt)
Black Mountain
Skorpion
Gamsberg
Sales (kt)
Black Mountain
Skorpion
Gamsberg
Revenue
NSR (USD/t)
Expenditure
CoP (USD/ton) - reported
EBITDA
1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19
2,589
2,950
3,236
3,419
3,124
2,541
2,631
2,709
2,159
2,332
2,492
2,529
2,383
2,108
1,964
2,038
64.47
64.30
64.80
64.36
66.80
70.20
72.11
70.4
32
43
47
35
25
28
38
54
18
20
21
13
15
13
18
19
14
23
26
22
10
15
20
21
14
45
43
47
37
24
29
32
56
21
13
15
13
18
19
26
22
9
16
14
30
7
8,010
8,530
9,700
8,220
5,730
5,410
6,220 10,020
2,761
3,085
3,185
3,452
3,574
2,657
2,696
2,540
4,800
4,640
5,240
5,630
4,880
5,250
4,160
6,110
1,690
1,470
1,383
1,976
2,355
2,428
1,757
1,488
3,210
3,890
4,460
2,590
850
160
2,060
3,910
FY18
3,048
2,378
64.5
157
72
85
172
34
48
34,460
3,107
20,310
1,630
14,150
FY19
FY20E
2,751
2,700
2,123
2,000
69.9
73.1
145
290
65
72
66
68
14
150
141
290
65
72
69
68
7
150
27,380 57,162
2,778
2,700
20,400 33,874
2,007
1,500
6,980 23,288
Source: MOFSL
Exhibit 8: Iron ore segment – INR million
62% benchmark (USD/dmt)
Sales Qty ('000 dmt)
Goa
Karnataka
Pig iron
Net Sales
EBITDA
1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19
61
72
65
73
63
62
70
79
2,300
700
1,800
2,700
1,400
300
700
1,400
1,900
100
1,000
2,400
1,000
100
100
400
600
800
300
400
200
600
1,400
134
154
171
185
164
173
155
191
6,870
5,420
8,430
1,070
7,880
6,150
6,580
8,530
400
-40
2,310
1,930
1,630
980
1,010
2,400
FY18
68
7,500
5,400
2,100
644
21,790
4,600
FY19
69
3,900
1,300
2,600
683
29,140
6,020
FY20E
56
4,400
4,400
691
25,031
4,901
Source: MOFSL
Exhibit 9: Power segment – INR million
Sales (m kwh)
S/A Jha. 600 MW
Subs
Balco 600MW
MALCO
HZL Wind Power
TSPL
TSPL PAF (%)
Revenue
Standalone
(INR/kwh)
EBITDA
Standalone
(INR/kwh)
Subs
1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19
1,838
2,950
3,146
3,108
3,314
3,514
3,165
564
93
111
404
164
124
136
1,274
2,857
3,035
2,704
3,150
3,390
3,029
551
132
466
388
656
480
438
4
0
0
0
0
0
0
156
143
57
58
139
185
48
563
2,582
2,512
2,258
2,355
2,725
2,543
20
87
97
93
91
94
81
7,330 14,310 17,240 17,640 15,900 17,180 16,230
1,350
100
210
2,460
360
270
420
2.4
1.1
1.9
6.1
2.2
2.2
3.1
1,100
3,660
5,950
5,970
4,250
3,780
3,640
277
-203
-253
737
-400
-500
-200
0.5
-2.2
-2.3
1.8
-2.4
-4.0
-1.5
823
3,863
6,203
5,233
4,650
4,280
3,840
4QFY19
3,522
615
2,907
593
0
79
2,235
85
15,930
1,460
2
3,600
-750
-1
4,350
FY18
3,127
1,172
1,955
1,537
4
414
7,915
74
56,520
4,120
16,680
557
16,123
FY19
13,517
1,039
12,478
2,168
0
451
9,859
88
65,240
2,510
15,270
-1,851
17,121
FY20E
6,050
3,548
11,496
2,068
0
434
8,994
80
62,032
7,429
2.1
14,479
355
14,124
Source: MOFSL
7 May 2019
4
 Motilal Oswal Financial Services
Vedanta
Exhibit 10: Zinc India segment – INR million
Y/E March
Mine prodn. (kt)
Sales
Zinc refined (kt)
Lead refined (kt)
Silver (tonnes)
Zinc LME (USD/t)
Net Sales
Change (YoY %)
EBITDA
Change (YoY %)
As % of Net Sales
1Q
233
FY18
2Q
3Q
219
240
4Q
255
1Q
212
FY19
2Q
3Q
232
247
FY18
4Q
245
947
FY19 FY20E
936
1,025
vs Est.
4Q
%
245
0
174
53
157
2,694
51,286
-18.3
25,811
-28.7
50.3
2
-2
27
1
7
8
190
193
200
210
34
40
45
50
110
146
132
167
2,589 2,950 3,236 3,180
45,760 53,090 59,220 62,770
80.8
50.6
18.9
0.3
23,840 30,240 32,440 36,200
110.8
45.6
16.5
-3.4
52.1
57.0
54.8
57.7
170
160
187
177
793
694
783
42
49
54
52
169
197
225
141
161
178
199
555
679
710
3,108 2,541 2,631 2,709
3,048
2,751 2,700
53,100 47,770 55,400 54,910 220,840 211,180 237,179
16.0 -10.0
-6.5 -12.5
27.7
-4.4
12.3
27,130 23,340 28,380 27,890 122,720 106,740 122,574
13.8 -22.8 -12.5 -23.0
26.0
-13.0
14.8
51.1
48.9
51.2
50.8
55.6
50.5
51.7
Source: MOFSL
7 May 2019
5
 Motilal Oswal Financial Services
Vedanta
Financials and Valuations
Income Statement
Y/E Mar
Net Sales
Change (%)
EBITDA
EBITDA Margin (%)
Depreciation
EBIT
Interest
Other Income
Extraordinary items
PBT
Tax
Tax Rate (%)
Min. Int. & Assoc. Share
Reported PAT
Adjusted PAT
Change (%)
2014
725,850
2,741.5
256,640
35.4
84,250
172,390
61,110
23,090
580
134,950
10,000
7.4
73,430
51,520
50,940
-8,690.2
2014
2,965
727,122
730,087
805,660
27,352
1,901,073
1,163,255
291,200
872,054
431,277
2,086
835,766
90,338
46,537
453,850
245,041
240,110
41,346
198,764
595,656
1,901,073
2015
749,223
3.2
221,381
29.5
71,616
149,765
56,989
28,910
-186,465
-64,779
19,488
-30.1
42,704
-126,970
59,495
16.8
2015
2,965
584,398
587,363
777,054
82,551
1,914,733
1,566,988
563,103
1,003,885
400,234
323
749,569
86,905
35,604
505,582
121,478
239,277
53,533
185,744
510,292
1,914,733
2016
642,618
-14.2
151,516
23.6
85,724
65,791
57,781
44,436
-337,847
-285,402
-106,776
37.4
-55,919
-122,705
215,143
261.6
2016
2,965
437,427
440,392
812,934
-52,679
1,566,258
1,506,034
728,375
777,659
279,260
488
809,719
80,117
25,279
570,460
133,864
300,867
62,124
238,743
508,852
1,566,258
2017
722,250
12.4
213,319
29.5
62,915
150,404
58,550
45,806
-1,144
136,516
37,783
27.7
43,584
55,122
56,266
-73.8
2017
3,718
601,284
605,001
906,308
-54,084
1,596,505
1,641,342
774,935
866,407
176,709
729
871,531
96,279
34,093
610,119
131,040
318,871
71,288
247,583
552,660
1,596,505
2018
918,660
27.2
251,640
27.4
62,830
188,810
57,830
35,740
8,230
174,950
57,430
32.8
33,500
84,020
75,790
34.7
2018
3,720
631,360
635,080
725,200
-8,560
1,511,290
1,809,670
847,730
961,940
161,400
1,640
673,660
119,670
53,160
337,520
163,310
287,350
84,260
203,090
386,310
1,511,290
2019
920,480
0.2
231,030
25.1
81,920
149,110
56,890
40,180
3,200
135,600
38,620
28.5
26,330
70,650
67,450
-11.0
2019
3,720
619,250
622,970
781,690
10,090
1,567,020
1,893,620
929,650
963,970
249,590
48,910
723,210
131,980
76,700
365,430
149,100
418,660
173,520
245,140
304,550
1,567,020
(INR Million)
2020E
909,868
-1.2
271,197
29.8
90,648
180,549
63,242
25,580
0
142,887
47,010
32.9
33,936
61,933
61,933
-8.2
2020E
3,720
636,962
640,682
799,363
21,378
1,634,192
2,001,308
1,020,298
981,011
234,911
48,901
704,249
119,654
42,377
393,118
149,100
334,880
89,740
245,140
369,369
1,634,192
2021E
947,006
4.1
285,100
30.1
97,476
187,624
63,949
27,518
0
151,193
49,743
32.9
36,738
64,709
64,709
4.5
2021E
3,720
673,249
676,969
799,363
33,322
1,705,502
2,110,577
1,117,774
992,804
220,021
48,898
782,322
124,538
44,107
464,577
149,100
338,543
93,403
245,140
443,779
1,705,502
Balance Sheet
Y/E Mar
Share Capital
Reserves
Net Worth
Debt
Deferred Tax
Total Capital Employed
Gross Fixed Assets
Less: Acc Depreciation
Net Fixed Assets
Capital WIP
Investments
Current Assets
Inventory
Debtors
Cash & Bank
Loans & Adv, Others
Curr Liabs & Provns
Curr. Liabilities
Provisions
Net Current Assets
Total Assets
(INR Million)
7 May 2019
6
 Motilal Oswal Financial Services
Vedanta
Financials and Valuations
Ratios
Y/E Mar
Basic (INR)
EPS
Cash EPS
Book Value
DPS
Payout (incl. Div. Tax.)
Valuation(x)
P/E
Price / Book Value
EV/Sales
EV/EBITDA
Dividend Yield (%)
Profitability Ratios (%)
RoE
RoCE
RoIC (pre-tax)
Turnover Ratios (%)
Asset Turnover (x)
Debtors (No. of Days)
Inventory (No. of Days)
Creditors (No. of Days)
Leverage Ratios (%)
Net Debt/Equity (x)
2014
17.2
45.6
246.2
3.3
22.7
0.0
0.0
0.0
0.0
0.0
7.7
18.4
20.7
1.6
23
45
21
0.5
2014
256,640
-46,653
-10,239
-43,741
0
156,008
-72,836
83,172
-4,105
14,967
-61,974
0
18,380
-46,752
-22,144
-50,516
43,518
410,333
453,850
2015
20.1
44.2
198.1
3.5
20.9
0.0
0.0
0.0
0.0
0.0
9.0
9.4
10.5
0.8
17
42
26
0.5
2015
221,381
15,811
-25,345
-33,796
0
178,051
-106,561
71,490
71,972
4,371
-30,218
0
-45,596
-62,898
-31,063
-139,558
8,276
453,850
462,126
2016
72.6
101.5
148.5
5.9
9.7
0.0
0.0
0.0
0.0
0.0
41.9
6.3
5.5
0.7
14
46
35
0.6
2016
151,516
-254
39,820
-24,513
0
166,568
-54,975
111,593
19,262
10,548
-25,165
0
12,278
-57,966
-30,838
-76,526
64,878
505,582
570,460
2017
15.1
32.1
162.7
19.5
154.2
10.8
1.0
1.4
5.6
11.9
9.7
12.4
15.2
0.9
17
49
36
0.5
2017
213,319
1,559
-7,404
-20,438
0
187,036
-55,010
132,026
26,986
-18,687
-46,712
-1,010
91,499
-61,501
-129,653
-100,665
39,660
570,460
610,119
2018
20.4
37.3
170.7
21.2
124.9
8.0
1.0
1.2
5.3
13.0
12.2
14.5
17.5
1.0
21
48
33
0.6
2018
251,640
7,460
-29,842
-31,980
0
197,278
-73,670
123,608
13,561
5,560
-54,549
-2,020
-189,598
-56,770
-166,940
-415,328
-272,599
610,119
337,520
2019
18.1
40.2
167.5
17.0
112.5
9.0
1.0
1.2
5.7
10.4
10.7
12.3
12.6
1.0
30
52
69
0.7
2019
231,030
-13,608
53,410
-26,770
0
244,062
-144,453
99,609
0
40,180
-104,273
0
56,490
-56,890
-111,479
-111,879
27,910
337,520
365,430
2020E
16.6
41.0
172.2
5.9
42.9
9.8
0.9
1.2
4.9
3.6
9.8
12.9
14.8
0.9
17
48
36
0.6
2020E
271,197
0
-37,131
-35,722
0
198,344
-93,010
105,335
0
25,580
-67,429
0
0
-63,242
-39,985
-103,227
27,688
365,430
393,118
2021E
17.4
43.6
182.0
6.4
43.9
9.4
0.9
1.1
4.4
3.9
9.8
12.9
15.1
1.0
17
48
36
0.5
2021E
285,100
0
-2,951
-37,798
0
244,351
-94,379
149,972
0
27,518
-66,861
0
0
-63,949
-42,082
-106,031
71,459
393,118
464,577
Cash Flow Statement
Y/E Mar
Adjusted EBITDA
Non cash opr. exp (inc)
(Inc)/Dec in Wkg. Cap.
Tax Paid
Other operating activities
CF from Op. Activity
(Inc)/Dec in FA & CWIP
Free cash flows
(Pur)/Sale of Invt
Others
CF from Inv. Activity
Inc/(Dec) in Net Worth
Inc / (Dec) in Debt
Interest Paid
Divd Paid (incl Tax) & Others
CF from Fin. Activity
Inc/(Dec) in Cash
Add: Opening Balance
Closing Balance
(INR Million)
7 May 2019
7
 Motilal Oswal Financial Services
Vedanta
NOTES
7 May 2019
8
 Motilal Oswal Financial Services
Vedanta
Explanation of Investment Rating
Investment Rating
Expected return (over 12-month)
BUY
>=15%
SELL
< - 10%
NEUTRAL
< - 10 % to 15%
UNDER REVIEW
Rating may undergo a change
NOT RATED
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within
following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Securities Ltd. (MOSL)* is a SEBI Registered Research Analyst having registration no. INH000000412. MOSL, the Research Entity (RE) as defined in the
Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial
products. MOSL is a subsidiary company of Motilal Oswal Financial Service Ltd. (MOFSL). MOFSL is a listed public company, the details in respect of which are available on
www.motilaloswal.com.
MOSL is registered with the Securities & Exchange Board of India (SEBI) and is a registered Trading Member with National Stock Exchange of India Ltd.
(NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India (MCX) & National Commodity & Derivatives Exchange Ltd. (NCDEX) for its stock broking
activities & is Depository participant with Central Depository Services Limited (CDSL) & National Securities Depository Limited (NSDL) and is member of Association of Mutual
Funds of India (AMFI) for distribution of financial products. Details of associate entities of Motilal Oswal Securities Limited are available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and
buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other
compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have
any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
MOSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report should
be aware that MOSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific merchant
banking, investment banking or brokerage service transactions. Details of pending Enquiry Proceedings of Motilal Oswal Securities Limited are available on the website at
https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental
research and Technical Research. Proprietary trading desk of MOSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated from
MOSL research activity and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability
or use would be contrary to law, regulation or which would subject MOSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong
Kong Securities and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst
Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of
research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity
to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these
securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not
located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Securities Limited (MOSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state
laws in the United States. In addition MOSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together
with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment
services provided by MOSL , including the products and services described herein are not available to or intended for U.S. persons. This report is intended for distribution only to
"Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional investors"). This
document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only
available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the
U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct
business with Institutional Investors based in the U.S., MOSL has entered into a chaperoning agreement with a U.S. registered broker-dealer, Motilal Oswal Securities International
Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S.
registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public
appearances and trading securities held by a research analyst account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets
services license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and
Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL
in respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”,
of which some of whom may consist of "accredited" institutional investors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the
SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and
inform MOCMSPL.
Specific Disclosures
1 MOSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOSL has not received any compensation or other benefits from third party in connection with the research report
10 MOSL has not engaged in market making activity for the subject company
****************************************************************
****************************************************************
7 May 2019
9
 Motilal Oswal Financial Services
Vedanta
The associates of MOSL may have:
- financial interest in the subject company
- actual/beneficial ownership of 1% or more securities in the subject company
- received compensation/other benefits from the subject company in the past 12 months
- other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
- acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
- be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the
company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies)
- received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.
The associates of MOSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not
consider demat accounts which are opened in name of MOSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOSL also earns DP income from
clients which are not considered in above disclosures.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the
research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
Terms & Conditions:
This report has been prepared by MOSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and
may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent
of MOSL. The report is based on the facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report is not recommendatory in nature.
The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty,
representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The
report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial
instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOSL will not treat recipients as
customers by virtue of their receiving this report.
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or
distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for
informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing
in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances.
The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this
document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this
document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views
expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative products as well as non-investment grade
securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of
the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and
should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make
modifications and alternations to this statement as may be required from time to time without any prior approval. MOSL, its associates, their directors and the employees may from
time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to
perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a
separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of
information that is already available in publicly accessible media or developed through analysis of MOSL. The views expressed are those of the analyst, and the Company may or
may not subscribe to all the views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on,
directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or
entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law,
regulation or which would subject MOSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all
jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. Neither
the Firm, not its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue
or lost profits that may arise from or in connection with the use of the information.
The person accessing this information specifically agrees to exempt MOSL or any of its affiliates
or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOSL or any of its affiliates or employees responsible for any such misuse
and further agrees to hold MOSL or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing
this information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022-3980
4263; www.motilaloswal.com. Correspondence Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad (West), Mumbai- 400 064. Tel No: 022 3080
1000. Compliance Officer: Neeraj Agarwal, Email Id:
na@motilaloswal.com,
Contact No.:022-38281085.
Registration details: MOSL: SEBI Registration: INZ000158836 (BSE/NSE/MCX/NCDEX); CDSL: IN-DP-16-2015; NSDL: IN-DP-NSDL-152-2000; Research Analyst: INH000000412.
AMFI: ARN 17397. Investment Adviser: INA000007100. Motilal Oswal Asset Management Company Ltd. (MOAMC): PMS (Registration No.: INP000000670) offers PMS and Mutual
Funds products. Motilal Oswal Wealth Management Ltd. (MOWML): PMS (Registration No.: INP000004409) offers wealth management solutions. *Motilal Oswal Securities Ltd.
is a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs, Insurance and IPO products. *Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. offers Real Estate
products. * Motilal Oswal Private Equity Investment Advisors Pvt. Ltd. offers Private Equity products.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National
Company Law Tribunal, Mumbai Bench. The existing registration no(s) of MOSL would be used until receipt of new MOFSL registration numbers.
7 May 2019
10