FOUNDATION COURSE

MAJOR PROJECT

GROUP NUMBER – 39
COMPANY – VEDANTA Ltd.

GROUP MEMBERS -

1. Shabbir Indorewala
2. Tyrel Jude Thomas
3. Vivek Shekhar
4. Vrushali Mendhekar
5. Yana Patel
6. Yash Agasty
7. Yash Mehta
8. Yashvi Madeka
9. Yogesh Saini

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 TABLE OF CONTENTS
1. Introduction..............................................................3
2. Graphical Representation.........................................4
3. Interpretation and analysis.......................................8
4. Ratio Representation................................................9
5. Ratio Analysis..........................................................14
6. Conclusion...............................................................15
7. References................................................................16

2
 INTRODUCTION

Vedanta Limited, a subsidiary of Vedanta Resources Limited is one of the world’s

leading diversified natural resources companies, founded in 1979, with it’s main
operations in iron ore, gold and aluminium mines in Goa, Karnataka, Rajasthan and
Odisha.
The company has been conferred with he CII-ITC Sustainability award, a FICCI
CSR award and Dun and Bradstreet award in Metals and mining.

Company has faced some controversies in early 2018 which lead to loss of $200
million on profit.

The major competitors of Vedanta Limited are Hindalco, JSW, Tata Steel,
Hindustancopper and ArcelorMittal.

This report considers the analysis and interpretation of profit and loss, sales revenue,
net worth, cost of goods sold, debt and equity, and total assets of the company from
financial statements of year- 2017-18, 2018-19, 2019-20 and 2020-21. The excel
worksheet is attached in the document.

3
 DATA ANALYSIS

Particulars 2018 2019 2020 2021

Profit/Loss 7,256 5,075 (6,732) 10,503

Net Sales 45,046 38,098 35,417 37,120

Fixed Assets 55,545 56,737 49,204 48,950

Current Assets 23,231 22,657 18,836 20,642

Equity 372 372 372 372

Net Worth 79,313 77,882 69,897 76,792

Debt 66,262 69,094 67,360 56,603

Cost Of Goods Sold 31,956 26,999 43,010 12,508

Profit/Loss
12,000
10503
10,000

8,000 7256

6,000 5075

4,000

2,000

0
2018 2019 2020 2021
(2,000)

(4,000)

(6,000)

(8,000) -6732

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 Net Sales
50,000
45046
45,000
40,000 38098 37120
35417
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
2018 2019 2020 2021

Fixed Assets
58,000 56737
55545
56,000

54,000

52,000

50,000 49204 48950

48,000

46,000

44,000
2018 2019 2020 2021

Current Assets
25,000 23231 22657
20642
20,000 18836

15,000

10,000

5,000

0
2018 2019 2020 2021

5
 Equity
400 372 372 372 372
350
300
250
200
150
100
50
0
2018 2019 2020 2021

Net Worth
82,000
79313
80,000
77882
78,000 76792
76,000
74,000
72,000
69897
70,000
68,000
66,000
64,000
2018 2019 2020 2021

Debt
80,000
66262 69094 67360
70,000
60,000 56603

50,000
40,000
30,000
20,000
10,000
0
2018 2019 2020 2021

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 Cost Of Goods Sold
50,000

45,000 43010

40,000

35,000 31956
30,000 26999
25,000

20,000

15,000 12508

10,000

5,000

0
2018 2019 2020 2021

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 Analysis and Interpretation

1. Operating income of year 2019 fell 15.2% from 2018 and of year 2020
fell 7.2% from 2019 but it rise 4.41% after opening of Tuticorin plant in
2021.
2. The company’s operating profit decreased by 10.5% on year on year
basis in 2020, this can be a result of global pandemic.
3. Total assets are increased by 2.28% since 2020 that shows company is
growing.
4. In 2021 the debt is decreased by 14.5% from 2018 that reflects company
has paid some amount back what it owes to it’s suppliers.
5. The shareholder equity is positive and constant for the past 4 years
which means company has enough assets to cover it’s liabilities.
6. The company’s expenses exceeded the revenue and it faced a net loss of
15.4% in 2019 year on year basis, in 2021 by lowering the expenses and
increasing the revenue results in net profit of 4.8%.
7. The net worth of a company for year 2019 fell 1.8% to that of 2018 but
did rise in 2021 by 9.8% from 2020.
8. The company has a good cash flow management .
9. Vedanta Ltd. has a strong degree of operating leverage, average
operating leverage stands at 34.50.
10. The company has contingent liabilities of Rs35,024 Crore.
11. The company’s cost of goods sold (COGS) of year 2019 decreases by
15.5% form 2018 , and of year 2020 increased by 59.3 % from 2019
then again of year 2021 decrease by 70.9% from 2020.
12. The company has increased employee’s benefit in 2021 by 12% from
2018

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 RATIO ANALYSIS

Current Ratio = Current Assets/Current Liabilities

Particulars 2018 2019 2020 2021

Current Assets 23231 22657 18836 20642

Current Liabilities 49645 48729 43905 36199

Current Ratio 0.47 0.46 0.43 0.57

Current Ratio
0.59
0.57
0.57

0.55

0.53

0.51

0.49
0.47 0.46
0.47

0.45

0.43
0.429017196
0.41
2018 2019 2020 2021

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 Quick Ratio = (Current Assets -inventories)/ Current Liabilities

Particulars 2018 2019 2020 2021

Current Assets 23231 22657 18836 20642

Inventories 8149 7657 5689 5555

Current Liabilities 49645 48729 43905 36199

Quick Ratio 0.30 0.31 0.30 0.42

Quick Ratio
0.43 0.42

0.41

0.39

0.37

0.35

0.33
0.31
0.30 0.299441977
0.31

0.29
2018 2019 2020 2021

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 Debt To Equity Ratio = Total Liabilities / Shareholders' Funds

Particulars 2018 2019 2020 2021

Total Liabilities 67856 72985 69553 60939

Total Shareholders'
79313 77882 69897 76792
Funds

Debt To Equity Ratio 0.86 0.94 1.00 0.79

Debt To Equity Ratio

1.03
1.00

0.98

0.94
0.93

0.88
0.86

0.83
0.793559225

0.78
2018 2019 2020 2021

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 Return On Equity Ratio = (Net Profit / Shareholders' Fund)*100

Particulars 2018 2019 2020 2021

Net Profit 7,256 5,075 (6,732) 10,503

Total Shareholders'
79,313 77,882 69,897 76,792
Fund

Return on Equity
9.15% 6.52% (9.63%) 13.68%
Ratio

Return on Equity Ratio

15.00% 13.68%

9.15%
10.00%
6.52%

5.00%

0
2018 2019 2020 2021

(5.00%)

(10.00%)
-0.096313146

(15.00%)

12
 Net Profit Margin = (Net Profit / Net Sales) * 100

Particulars 2018 2019 2020 2021

Net Profit 7,256 5,075 (6,732) 10,503

Net Sales 45,046 38,098 35,417 37,120

Net Profit Margin 16.11% 13.32% (19.01%) 28.29%

Net Profit Margin

40.00%

28.29%
30.00%

20.00% 16.11%
13.32%

10.00%

0
2018 2019 2020 2021

(10.00%)

(20.00%)
-0.190078211
(30.00%)

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 Ratio Analysis

1. Current ratio is also called as Liquidity Ratio. In Vedanta Ltd. Year

2020 Current ratio was lowest was 0.43 and Year 2021 Current ratio
highest is 0.57. Which is indicate that company only pay 57% Debt in
short Run.
2. Quick Ratio of Vedanta Ltd. Show that company does not have liquid
assets to cover current liabilities. In Year 2021 company can pay 42%
of current debt.
3. Debt To Equity Ratio of Vedanta Ltd. Indicates in Year 2020 borrowed
more funds from shareholders that is 1.00. Year 2018 to 2020 there is
upward trend in borrowed funds from shareholder but in Year 2021
there is significant drop in borrowing which is 0.79
4. Return On Equity Ratio of Vedanta Ltd. Show that before COVID
company giving 6.50% to 9.15% Return to shareholders but in COVID
Period which is Year 2020 company suffer heavy loss that is 9.63% And
Year 2021 Company give Return of 13.68%.
5. Net Profit Margin of Vedanta Ltd. Before COVID is Good but in Year
2021 company suffer loss of 19.01%. In Year 2021 company make Net
profit of 28.29% Which highest last 4 years.

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 CONCLUSION

1. Company is expected to give good quarter.

2. Company has been maintaining a healthy dividend payout of 35.98%.
3. Promoter holding has increased by 10.7% over a last quarter.
4. The company has delivered a poor sales growth of 6.49% over past 4 years.
5. Company has a low return on equity of 6.80% for last 3 years.

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 REFERENCES

1. The official website of Vedanta LTD. Available at :

https://www.vedantalimited.com/Pages/Home.aspx

2. Knowing about the company Vedanta LTD. At :

https://en.wikipedia.org/wiki/Vedanta_Limited

3. Reviewed the balance sheet and profit and loss account at :

https://www.moneycontrol.com/financials/vedanta/balance-sheetVI/SG

4. Previous year annual report at : https://www.equitymaster.com/research-

it/annual-results-analysis/amp/SESA/VEDANTA-2019-20-Annual-Report-
Analysis/907

5. Analysis of company at :
https://www.screener.in/company/VEDL/consolidated/

6. Investing help search engine at :https://ticker.finology.in/company/VEDL

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