An Intrinsic Calculation For Vedanta Limited (NSE:VEDL) Suggests It's 44% Undervalued
Jan 20
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Indian (NIFTY) Materials Sector Analysis
UpdatedJan 20, 2025
DataAggregated Company Financials
Companies734
- 7D0.2%
- 3M-9.0%
- 1Y7.3%
- YTD-2.6%
The Materials is pretty flat in the last 7 days, but Vedanta has stood out, gaining 9.8%. As for the the longer term, the industry is up 7.3% over the past 12 months. As for the next few years, earnings are expected to grow by 25% per annum.
Sector Valuation and Performance
Has the Indian Materials Sector valuation changed over the past few years?
| Date | Market Cap | Revenue | Earnings | PE | Absolute PE | PS |
|---|---|---|---|---|---|---|
| Mon, 20 Jan 2025 | ₹46.0t | ₹24.0t | ₹1.4t | 28.1x | 33.4x | 1.9x |
| Wed, 18 Dec 2024 | ₹49.4t | ₹24.0t | ₹1.4t | 30.8x | 35.9x | 2.1x |
| Fri, 15 Nov 2024 | ₹46.7t | ₹23.9t | ₹1.4t | 29.3x | 33.6x | 1.9x |
| Sun, 13 Oct 2024 | ₹51.5t | ₹24.0t | ₹1.3t | 31x | 39.5x | 2.1x |
| Tue, 10 Sep 2024 | ₹50.6t | ₹24.0t | ₹1.3t | 30.7x | 38.9x | 2.1x |
| Thu, 08 Aug 2024 | ₹49.8t | ₹23.9t | ₹1.3t | 29.7x | 38.4x | 2.1x |
| Sat, 06 Jul 2024 | ₹51.5t | ₹23.8t | ₹1.3t | 30.9x | 39.3x | 2.2x |
| Mon, 03 Jun 2024 | ₹46.6t | ₹23.9t | ₹1.3t | 26.5x | 35.2x | 2x |
| Wed, 01 May 2024 | ₹45.8t | ₹23.9t | ₹1.4t | 28.1x | 33.4x | 1.9x |
| Fri, 29 Mar 2024 | ₹41.5t | ₹24.0t | ₹1.4t | 24.1x | 30x | 1.7x |
| Sun, 25 Feb 2024 | ₹42.5t | ₹24.0t | ₹1.4t | 27x | 30.7x | 1.8x |
| Tue, 23 Jan 2024 | ₹42.4t | ₹24.4t | ₹1.4t | 27.3x | 30.6x | 1.7x |
| Thu, 21 Dec 2023 | ₹40.8t | ₹24.4t | ₹1.4t | 24.4x | 29.8x | 1.7x |
| Sat, 18 Nov 2023 | ₹38.9t | ₹24.3t | ₹1.4t | 24.3x | 28.5x | 1.6x |
| Mon, 16 Oct 2023 | ₹38.4t | ₹24.4t | ₹1.4t | 24.1x | 27.5x | 1.6x |
| Wed, 13 Sep 2023 | ₹38.3t | ₹24.4t | ₹1.4t | 23.3x | 27.4x | 1.6x |
| Fri, 11 Aug 2023 | ₹36.8t | ₹24.4t | ₹1.4t | 21.7x | 25.5x | 1.5x |
| Sun, 09 Jul 2023 | ₹35.7t | ₹24.5t | ₹1.6t | 19.7x | 23x | 1.5x |
| Tue, 06 Jun 2023 | ₹34.4t | ₹24.5t | ₹1.6t | 18.9x | 22.1x | 1.4x |
| Thu, 04 May 2023 | ₹33.7t | ₹24.1t | ₹1.7t | 16.9x | 19.4x | 1.4x |
| Sat, 01 Apr 2023 | ₹31.8t | ₹24.2t | ₹1.8t | 15.6x | 17.6x | 1.3x |
| Mon, 27 Feb 2023 | ₹32.0t | ₹24.2t | ₹1.8t | 16.2x | 17.7x | 1.3x |
| Wed, 25 Jan 2023 | ₹33.4t | ₹23.7t | ₹2.0t | 17.1x | 16.5x | 1.4x |
| Fri, 23 Dec 2022 | ₹33.4t | ₹23.6t | ₹2.1t | 16.6x | 16.2x | 1.4x |
| Sun, 20 Nov 2022 | ₹33.3t | ₹23.6t | ₹2.1t | 16.5x | 16.1x | 1.4x |
| Tue, 18 Oct 2022 | ₹32.6t | ₹22.6t | ₹2.4t | 16.7x | 13.5x | 1.4x |
| Thu, 15 Sep 2022 | ₹34.9t | ₹22.6t | ₹2.4t | 17x | 14.5x | 1.5x |
| Sat, 13 Aug 2022 | ₹32.7t | ₹22.4t | ₹2.4t | 15.9x | 13.5x | 1.5x |
| Mon, 11 Jul 2022 | ₹28.9t | ₹21.1t | ₹2.5t | 15.1x | 11.8x | 1.4x |
| Wed, 08 Jun 2022 | ₹29.9t | ₹21.1t | ₹2.5t | 15.2x | 12.2x | 1.4x |
| Fri, 06 May 2022 | ₹33.2t | ₹19.8t | ₹2.4t | 16.4x | 14x | 1.7x |
| Sun, 03 Apr 2022 | ₹34.2t | ₹19.4t | ₹2.3t | 16.1x | 14.7x | 1.8x |
| Tue, 01 Mar 2022 | ₹32.0t | ₹19.7t | ₹2.4t | 14.5x | 13.4x | 1.6x |
| Thu, 27 Jan 2022 | ₹32.9t | ₹18.6t | ₹2.3t | 16.6x | 14.4x | 1.8x |
Price to Earnings Ratio
14.4x
Current Industry PE
- Investors are optimistic on the Indian Materials industry, and appear confident in long term growth rates.
- The industry is trading at a PE ratio of 33.4x which is higher than its 3-year average PE of 24.3x.
- The 3-year average PS ratio of 1.7x is lower than the industry's current PS ratio of 1.9x.
Past Earnings Growth
- The earnings for companies in the Materials industry have declined 15% per year over the last three years.
- Meanwhile revenues for these companies have grown 8.9% per year.
- This means that although more sales are being generated, either the cost of doing business or the level of investment back into businesses has increased, which has decreased profits.
Industry Trends
Which industries have driven the changes within the Indian Materials sector?
| IN Market | -0.26% | |
| Materials | 0.22% | |
| Metals and Mining | 2.20% | |
| Basic Materials | -0.21% | |
| Chemicals | -1.25% | |
| Paper and Forestry Products | -1.41% | |
| Packaging | -2.11% | |
Industry PE
- Investors are most optimistic about the Chemicals industry which is trading above its 3-year average PE ratio of 35.4x.
- Analysts are expecting annual earnings growth of 23.3%, which is higher than its past year's earnings growth of 9.6% per year.
- Investors are most pessimistic about the Metals and Mining industry, although it looks like investor sentiment has improved given that it's trading above its 3-year average of 16.6x.
Forecasted Growth
- Analysts are most optimistic on the Paper and Forestry Products industry, expecting annual earnings growth of 38% over the next 5 years.
- This is better than its past earnings decline of 17% per year.
- In contrast, the Basic Materials industry is expected to see its earnings grow by 16% per year over the next few years.
Top Stock Gainers and Losers
Which companies have driven the market over the last 7 days?
| Company | Last Price | 7D | 1Y | Valuation | |
|---|---|---|---|---|---|
| 500188 Hindustan Zinc | ₹465.35 | 10.9% +₹193.5b | 47.8% | PE22.5x | |
| VEDL Vedanta | ₹460.95 | 11.4% +₹184.4b | 74.0% | PE15.9x | |
| 500440 Hindalco Industries | ₹618.05 | 9.7% +₹120.8b | 10.2% | PE11x | |
| 500470 Tata Steel | ₹131.65 | 7.1% +₹108.6b | -1.7% | PE56.3x | |
| 500425 Ambuja Cements | ₹534.45 | 8.4% +₹101.7b | -1.2% | PE44.3x |
