Vedanta’s share price dropped over 4% today, closing at Rs 435.75. The entire metal sector traded in the red, with major stocks witnessing losses.
In the Nifty metal index, Vedanta was among the top losers, along with National Aluminium and SAIL, which also fell over 4%. NMDC, Welspun Corp, and Tata Steel declined more than 3% during the session among other metal stocks.
The Nifty Metal Index ended at 8,359.25, down 226.55 points or 2.64%, while the BSE Metal Index closed at 28,153.89, losing 759.09 points or 2.63%.
Let’s take a look at the reasons Vedanta share price decline:
1. Trump’s tariff move hits metal stocks
One of the key reasons for the decline in metal stocks, including Vedanta, is the market reaction to US President Donald Trump’s announcement to impose a 25% tariff on steel and aluminum imports.
With an aim to protect American industries under his “Make America Great Again” policy, has escalated global trade tensions, with China already imposing retaliatory tariffs, triggering a sell-off in metal stocks amid fears of reduced exports and revenue losses.
2. Vedanta faces Rs 141.36 Crore tax penalty over ITC claims
Another reason that prompted Vedanta’s share price drop is that the company has been slapped with two penalty orders by the CGST & Central Excise, Rourkela Commissionerate, totalling Rs 141.36 crore. The first penalty of Rs 86.06 crore pertains to the alleged wrongful use of Input Tax Credit (ITC) in 2017-18, while the second, amounting to Rs 55.30 crore, is linked to ineligible ITC claims under Section 17(5) of the CGST Act for 2017-18 to 2019-20. This was announced by the company through an exchange filing on February 8.
“The Company intends to file an appeal against the said Orders with the Appellate Authorities. The Company is hopeful of a favorable outcome thereof and does not expect the said Orders to have any material financial impact on the Company,” added the company in an exchange filing on Saturday (February 8).
Vedanta Q3FY25 performance
Vedanta on January 31 announced its Q3FY25 result. The company’s net profit jumped 77% YoY to Rs 3,547 crore. Revenue rose 10% YoY to Rs 38,526 crore, while EBITDA hit a record Rs 11,284 crore, up 30% YoY, with margins improving to 34%. The Aluminium segment led the growth with a 58% YoY rise in EBITDA, while Zinc India reported a 28% YoY increase.
Vedanta stock performance
As of the latest, Vedanta delivered a 62.5% return over the past year. Over the last six months, the share price of Vedanta has gained 0.84%, while in the past month, it has risen 0.83%. However, in the past five days, it has declined 0.10%.
The stock is 17.3% below its 52-week high of Rs 526.95 and has more than doubled from its 52-week low of Rs 249.50. Vedanta’s market capitalisation stands at Rs 1.62 lakh crore.