Vedanta to Invest $4 Billion to Double Oil Production in India

Mining conglomerate Vedanta Ltd under the leadership of Chairman Anil Agarwal announced a bold investment plan to enhance oil production in India. Despite concerns about debt levels the company is determined to pursue an aggressive expansion strategy in the oil and gas sector. Vedanta plans to invest $4 billion over the next three years with the aim of doubling its oil production capacity. This ambitious endeavor targets reaching 300,000 barrels per day (15 million tonnes annually) through an intensive exploration campaign.

Currently Vedanta produces approximately 140,000 barrels per day of oil and oil equivalent gas. With promising acreage in northeast and deep water regions the company foresees growth opportunities and remains committed to further investment. Chairman Anil Agarwal expressed confidence in India's potential citing its abundant resources and growing market demand. Despite being a major oil importer Agarwal believes India has the capacity to achieve 50% energy self sufficiency.

Regulatory Framework and Taxation

While acknowledging India's improved regulatory environment Agarwal highlighted the need for tax reforms in the oil and gas sector. He emphasized the disparity between India's high tax rates (65%) and the global average (35%) advocating for tax reductions to enhance competitiveness.
Vedanta has partnered with leading US oilfield service companies like Halliburton and Baker Hughes to bolster its operational capacity.

These collaborations reflect Vedanta's commitment to leveraging external expertise for efficient expansion.Despite concerns from rating agencies regarding debt levels Chairman Agarwal reaffirmed Vedanta's commitment to investment. He stressed that Vedanta is strong and can handle obstacles as it aims for planned expansion.

Vedanta’s Q3 Result & Stock Performance

The mining major reported a decline of 18.3% in consolidated net profit yoy to ₹2,013 crore, despite a slight revenue increase of 4.2% to ₹35,541 crore during the OctoberDecember period. This decrease was due to a particularly profitable quarter a year ago which included a one time gain of ₹903 crore.

Vedanta's profit margin which indicates how well it's doing financially improved by 330 basis points (bps) from last year to hit 24%, as per official filings. Reported EBITDA ₹8,531 crore this fiscal quarter, compared to ₹7,067 crore for the same quarter last year. After the result CLSA a financial services firm kept its target for Vedanta's stock steady at ₹230 currently trading at ₹281

Over the past month, Vedanta's share price has increased by 9.09%. Looking at the past 6 months the share price has risen by 18.49%. However over the past year there has been a decrease of 8.50% in the share price. In contrast over the past 5 years Vedanta's share price has soared by 82.91%.

Final Words

Vedanta's business covers a lot of different areas like mining iron ore, bauxite, making aluminum, copper, zinc, generating power and extracting oil. Anil Agarwal the head of Vedanta has built the company into a big in India's natural resources world.