Vedanta hits 52-week low; stock down 26% in three months

The stock hit a 52-week low of Rs 229, down 4% on the BSE.

Shares of Vedanta hit a 52-week low of Rs 229, down 4% on the BSE in intra-day trade, after the media reports suggested that the company is facing Sterlie-like crisis in Orissa.

The BSE said the Exchange has sought clarification from Vedanta with respect to news article appearing on The Free Press Journal - June 14, 2018 titled "Vedanta faces another Sterlite like crisis in Orissa". The reply is awaited.

In past three months, Vedanta has underperformed the market by falling 26% as compared to 7% rise in the S&P BSE Sensex.

Last month, the Tamil Nadu government ordered the closure of Vedanta Group's Sterlite copper plant at Thoothukudi. The development comes after 13 people were killed in police firing during protests.

“Given the legal proceedings, any long standing closure of copper operations will impact the consolidated performance of Vedanta. However, the impact would be limited as copper operations contribute only around 5% of EBITDA,” analysts at ICICI Securities said in company update.

Analysts at JP Morgan believe the following factors are the positive levers for Vedanta namely: oil exit production rate of 200kboepd seen in March, aluminum exit production rate of 2MT and comments on Gamsberg production commencement by mid CY18. The above underpins the solid volume growth pipeline for the company across oil, zinc and aluminum, and would more than offset any weakness from delays in restart of iron ore mining in Goa and copper smelting operations.

At 10:29 am; Vedanta was trading 3.6% lower at Rs 230 on the BSE, as compared to 0.08% decline in the S&P BSE Sensex. A combined 5.1 million shares changed hands on the counter on the BSE and NSE so far.