Vedanta, a prominent natural resources company, experienced a decline in its shares, falling nearly 3 per cent in Monday’s trade. The negative sentiment towards the stock is attributed to a combination of factors:
- Missed June Quarter Results: The company’s performance in the June quarter did not meet market expectations, which may have led to a negative sentiment among investors.
- Concerns Over Higher Debt Figures: Investors are concerned about Vedanta’s higher debt levels, which can impact the company’s financial stability and ability to generate returns for shareholders.
- Likely Lower Dividends Ahead: There are apprehensions among investors that Vedanta may reduce dividends in the future due to its financial position and debt repayment obligations.
- Upcoming Debt Repayment and Capex Impetus: The company faces upcoming debt repayment obligations at the parent level. Additionally, if Vedanta plans to venture into the semiconductor business, it may require further capital expenditure (capex), which could hamper its deleveraging initiatives.
These factors, when combined, can contribute to the negative sentiment surrounding Vedanta’s stock and lead to downward pressure on its share price.
Globally, the commodities market is facing multiple headwinds such as inflationary pressure, monsoon-led seasonal slowdown, muted demand pick-up from China, and a slowdown in the Chinese real estate sector, it said adding that it has largely retained its FY25 Ebitda and adjusted profit forecasts for Vedanta.
