Vedanta Resources is trading at £9.13, with the share price is down 16% since the company reported first-quarter figures in July. The company also reported a 7% jump in revenue and a 1% increase in earnings.
Vedanta’s businesses are split between energies and metals. In Q1, sales at the oil and gas business rose by 3% while copper revenues increased by 36%, and the decline in the Indian rupee brought down the costs at the company’s aluminium business, which, coupled with strong aluminium prices, meant a 74% increase in earnings. The news was not all positive, though; zinc revenues fell by 8% as production levels fell.
Equity analysts have a moderately bullish outlook for the stock, and out of the 17 ratings, six are buys, eights are holds and three are sells.
This trading update will be crucial given that commodity prices have been hit hard recently. Oil has dropped to a two-year low and copper is now at a five-month low. Efficiency and cost-cutting may be required to offset the weak prices.
The 200-daily-moving average of £9.80 is acting as resistance. If the stock drops below £9, it could target £8 over the next few months.