Vedanta Group Shines in Dalal Street: Surge in Market Cap Tops Rs 2.2 Lakh Crore

Vedanta Group, including Vedanta Ltd and Hindustan Zinc Ltd, has surged its market valuation by Rs 2.2 lakh crore in the current fiscal. This growth outpaced leading Indian firms like Reliance Industries and Tata Group. Factors such as proposed demerger, management’s deleveraging strategies, and improved earnings drove this impressive performance.

In a remarkable financial feat, Vedanta Group, consisting of Vedanta Ltd and Hindustan Zinc Ltd, has generated unparalleled wealth for investors on Dalal Street, with their combined market valuation skyrocketing by Rs 2.2 lakh crore in the current fiscal year.

Data from stock exchanges reveal that the market capitalisation of the Vedanta Group surged by this significant margin between March 28 and June 20, 2024. This surpasses the market cap growth recorded by major Indian corporations like Reliance Industries, Mahindra Group, and the Tata Group within the same timeframe.

The stocks of Vedanta and Hindustan Zinc have seen a remarkable resurgence from their 52-week lows, buoyed by positive developments such as a proposed demerger, the management's consistent deleveraging efforts, and a notable earnings improvement. Compared to their peers, Adani and Mahindra groups each reported a market cap rise of Rs 1.4 lakh crore, while the Tata Group's market cap rose by over Rs 60,600 crore, and RIL's market valuation declined by more than Rs 20,656.14 crore.

Notably, Vedanta delivered its second-highest-ever revenue of Rs 1,41,793 crore and an EBITDA of Rs 36,455 crore in FY24, maintaining an EBITDA margin of 30% amid a moderate commodity cycle. Seeking to achieve an EBITDA of USD 10 billion soon, the group has laid out a strategic roadmap with over 50 high-impact growth projects in zinc, aluminium, oil & gas, and power sectors.

The rising investor confidence is certified by the increased shareholding of institutional buyers, with foreign institutional investors' holding in Vedanta rising to 8.77% by the end of the March quarter from 7.74% a quarter prior. Analysts also note that the strengthening of commodity prices and the benefits from cost optimisation initiatives set to kick in from FY25 will bolster Vedanta's profitability.

On May 22, shares of Vedanta and Hindustan Zinc reached all-time highs of Rs 506.85 and Rs 807 respectively. Most recently, shares of Vedanta climbed 4.86% to Rs 470.25, while Hindustan Zinc increased by 2.29% to Rs 647.65 on the BSE on Thursday.

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