Vedanta Oil and Gas Ltd shares fell 7.38 percent to Rs 41.30 on the NSE on July 3, down Rs 3.29 from the previous close of Rs 44.59. The stock swung in a wide intraday range of Rs 41.10 to Rs 47.60, having opened higher before sliding through the session on profit booking. Its 52 week range stands at Rs 30.42 to Rs 47.60, a band largely built over the past few weeks since listing. Average trading volume stood at 43.92 million shares. P/E ratio and dividend yield were not available given the company’s recent listing.
The decline follows a sharp two session rally in which the stock had gained around 40 percent, touching a high of Rs 45.37 on July 2. That move came as investors began pricing Vedanta Oil and Gas as a standalone pure play entity following its demerger from Vedanta Limited, with the four new entities from the demerger, including Vedanta Oil and Gas, having listed independently on June 15. The stock’s recent volatility has also been shaped by its transition out of the trade to trade segment, where it spent its first ten sessions with restricted intraday trading, into the B group toward the end of June, which allowed for freer price discovery and higher volumes.
The company’s asset base includes an estimated 2.9 billion barrels of oil equivalent in resources, with proven reserves and resources of approximately 1.3 billion boe, anchored by its Rajasthan block alongside smaller contributions from Ravva and Cambay. Credit rating agency ICRA has assigned an AA+ rating with a stable outlook to the company’s long term fund based term loans, citing its established position in India’s upstream exploration sector and competitive operating costs.
On earnings, the company has guided for a sharp ramp up in profitability, targeting EBITDA of around 939 million dollars, translating to roughly Rs 8,900 crore, for the coming fiscal year, against a current market capitalisation of around Rs 16,500 crore. Actual EBITDA stood at 557 million dollars in FY25 and 492 million dollars in FY26, with estimates rising to 656 million dollars in FY27, 939 million dollars in FY28 and 961 million dollars in FY29, based on assumed Brent crude prices ranging between 70 and 85 dollars a barrel and production estimates rising from 88 thousand barrels of oil equivalent per day in FY26 to 150 thousand by FY29. The company has outlined capital expenditure of around Rs 6,600 crore to support this production growth. If the underlying targets hold, the stock would trade at roughly two times EV to EBITDA on forward estimates, a valuation well below listed peer ONGC.
Investors are being advised to weigh the company’s growth targets against the inherent risks of the exploration and production business, including crude price volatility, geological and technical execution risk at existing blocks, and the pace of regulatory approvals for new exploration activity. Production updates from the Rajasthan block, progress on the capital expenditure plan, and debt management as a standalone entity remain key monitorables going forward.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. The figures and securities mentioned are for analysis and illustration, not recommendations. Markets carry risk, and readers should conduct their own research or consult a registered financial adviser before making any investment decision.
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