Motilal Oswal - Vedanta Limited (VEDL) MOSL: VEDANTA (Buy)-Zinc day - production to grow after a hiatus of 6 years-Raising estimates and target price

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Motilal Oswal

MOSL: VEDANTA (Buy)-Zinc day - production to grow after a hiatus of 6 years-Raising estimates and target price

Vedanta: Zinc day - production to grow after a hiatus of 6 years; Raising estimates and target price; Maintain BUY

(VEDL IN, Mkt Cap USD18.2b, CMP INR314, TP INR361, 15% Upside, Buy)

We interacted with the management of Hindustan Zinc (HZL) and Zinc-international (ZI) during Vedantaâ€™s (VEDL) Zinc day at Udaipur on 30th Aug and visited S. K. mines (SKM) and Debari Smelter on 31st Aug., 2017. VEDL is targeting to increase Zinc-lead mine production at CAGR of ~15% over FY17-20E to ~1.6mt. We have upgraded volumes, earnings and target price. Key highlights.

HZL: after an hiatus of 6 years, mine production to grow 27%

Expansion of mines by 20% to 1.2mtpa is on track. Shaft sinking at both Rampur Agucha and SKM has reached respective deepest points. Full commissioning of shafts is expected during FY19E. Therefore, we expect mine production to grow at CAGR of ~8.4% to 1.15mt in FY20E.

Exploration of Zawar and Kayad group of mines is yielding positive results. Some very rich silver pockets are found during exploration.

HZL: targeting to double silver production to 1000t

Silver production will get a boost as well, increasing from 452t in FY17 to 700t by FY20E, on higher output from silver rich SKM.

HZL has planned recovery from waste material of zinc concentrate and tailings for the first time, which has potential of additional 300t recovery.

02/09/2017 12 EN

Underlying

Vedanta Limited

Vedanta is diversified natural resources company. Co.'s business is principally located in India. Co. maintains operations in Australia, United Arab Emirates, South Africa, Namibia and Ireland. Co. is primarily engaged in zinc, oil and gas, iron ore, copper, aluminium and commercial power generation businesses and is also developing and operating port operation businesses and infrastructure assets. Co.'s operations are organized along four business divisions: Zinc (fully-integrated zinc business operated by HZL); Oil & Gas (domestic oil production through Cairn India); Iron Ore; Copper (custom smelting); Aluminum (Balco); and Power (multiple power plants across locations in India).

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INE205A01025 National Stock Exchange of India India

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Motilal Oswal

Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.

Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.

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MOSL: VEDANTA (Buy)-Zinc day - production to grow after a hiatus of 6 years-Raising estimates and target price

Vedanta Ltd: 2 directors

MOSL: VEDANTA (Neutral)-Result below estimates; coal costs dent EBITDA

VEDANTA sees an upgrade to Slightly Positive due to a better fundamental star rating

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

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