Why Vedanta Share is Falling Continuously?
For the Last 12 months, Vedanta share price has been going down continuously. Currently, the Vedanta stock is trading around Rs 150.
In January 2018 Vedanta was traded at Rs 340. After that, the stock is falling continuously and it falls in the vertical path. You can see it in the image.
Performance of Vedanta in 3rd Quarter of FY19
- Vedanta revenue was lower 3% on a Y-O-Y basis to Rs 23669 crore in Q3FY19 mainly on account of the shutdown of copper smelter at Tuticorin and lower commodity prices
- On the other hand, Vedanta revenue was higher 4% on a Q-O-Q basis sequentially primarily on account of higher volume at Zinc India & Aluminium business and currency depreciation.
- EBITDA for the quarter was at 5645 crores (down 16.5% YoY, up 8.4% QoQ) mainly on account of lower commodity prices, input commodity inflation and shutdown of copper smelter at Tuticorin.
Financials of Vedanta
- If you look at the Key Financials of Vedanta you will find that Net Sales, EBITDA & EPS all decreased in FY 19. At the same time, it looks like Net Sales, EBITDA & EPS will improve in FY20.
One of the Major Reason that leads to falling in Vedanta Share price
- Cairn India’s investment in Anglo American PLC issue
- Vedanta’s subsidiary Cairn India Holdings’ purchase of a stake amounting to $200 million (Rs 1,431 crore) in Anglo American Plc from Volcan Investments, a family trust of Anil Agarwal.
- Investors think that there is a Governance Issue in this deal.
- Vedanta gives the Clarification that Cairn India’s investment in Anglo American met all governance standards and there is not a Governance Issue in this deal but investors are not influenced with the Clarification.
How much will it fall? Will it touch 100?
- Currently (14th February 2019)Vedanta share price is trading around Rs 150.
- There are multiple support levels between 145 to 160. After that, at the level of 100, there is a very strong support level. You can see it in the image.
- If Vedanta breaks the level of145 then it might touch the level of 100. But it’s very hard for Vedanta to break the level of
If you have Vedanta share then what should you do?
- If you have a view of 2 years or less you can exit from Vedanta because in the next 2 years there is very less possibility that it will go up.
- But if you have a view of 3 years or more you can hold the stocks. In the next 3 years, you will see the major upside in Vedanta.
Why I am advising you to hold the Stock?
- The most important thing is that if you hold Vedanta share you will get (6–7) % return as a dividend.
- Vedanta is not a small company. Vedanta Resources Limited is a globally diversified natural resources company.
- If you hold, you are not going to lose your money.
(Note: The stocks mentioned are for reference only and not buy or sell ideas)