BofA Upbeat on Vedanta Resources Amid Liquidity Improvements

Bank of America Global Research continues to back Vedanta Resources and its subsidiary, citing improved liquidity, reduced debt, and refined financial strategies. BofA acknowledged allegations by Viceroy Research but emphasized cost reductions and strategic decisions, projecting reduced debts and enhanced cash flow in coming years.

Bank of America (BofA) Global Research has reiterated its positive outlook on Vedanta Resources and its subsidiary, following a report that highlights improved liquidity and cost management. Despite allegations from Viceroy Research criticizing the company's financial structure, BofA remains optimistic due to reduced debt and strategic financial adjustments.

Vedanta has actively countered Viceroy's allegations, emphasizing recent financial maneuvers. The company has managed to bring down its debt to $5.3 billion by the end of FY 2025, aided by dividend flows and brand fees from Vedanta Ltd, along with a planned stake sale that reduced ownership to 56.4%.

BofA projects that Vedanta's debt servicing requirements will decrease significantly, with an estimated need dropping from $1.8 billion in FY25 to $1.1 billion in FY26. The firm anticipates further improvements in free cash flow at Vedanta Ltd, driven by increased earnings and potential cost savings, stating the yield on Vedanta's securities as attractive compared to other regional players.

(With inputs from agencies.)