As we get news of imminent availability of COVID vaccine, investors need to start looking at sectors that will likely see a boost as the world comes out of the pandemic.
Clearly, basic materials and energy will see increasing demand with economic recovery around the world. I expect Vedanta to have a significant re-rating, in a post Corona world.
This company is priced attractively, has significant market position in multiple critical areas, is seeing lot of news flow starting to turn - like Zambia Copper judgement going in their favor, coal auctions, BPCL stake sale, etc.
Yes - the financial overleveraging of their parent is a matter for concern - but there’s lot of options available for Anil Agarwal to address this. Market was spooked about excess debt in Reliance - but the entire debt was addressed in a matter of months by financial engineering.
When you have quality assets, you can always get cash against them - whether as debt or equity. And all the assets Vedanta is picking up are high quality assets. BPCL acquisition is a no-brainer for a company with a proven track record of turning around state controlled companies, plus its a perfect vertical integration play to keep more margins inside the company.
Overall, this is a company that is massively undervalued and could easily see the kind of spike we saw in Reliance, with a potential doubling (or even more) of the stock.
Clearly, basic materials and energy will see increasing demand with economic recovery around the world. I expect Vedanta to have a significant re-rating, in a post Corona world.
This company is priced attractively, has significant market position in multiple critical areas, is seeing lot of news flow starting to turn - like Zambia Copper judgement going in their favor, coal auctions, BPCL stake sale, etc.
Yes - the financial overleveraging of their parent is a matter for concern - but there’s lot of options available for Anil Agarwal to address this. Market was spooked about excess debt in Reliance - but the entire debt was addressed in a matter of months by financial engineering.
When you have quality assets, you can always get cash against them - whether as debt or equity. And all the assets Vedanta is picking up are high quality assets. BPCL acquisition is a no-brainer for a company with a proven track record of turning around state controlled companies, plus its a perfect vertical integration play to keep more margins inside the company.
Overall, this is a company that is massively undervalued and could easily see the kind of spike we saw in Reliance, with a potential doubling (or even more) of the stock.