Research Update: Vedanta Resources Ltd. Outlook Revised To Negative On Weaker Operating Performance; 'B+' Ratings Affirmed

Softer base metal and oil prices and declining but still elevated input costs for aluminum will likely keep Vedanta Resources' profitability and cash flows lower than our previous expectations. Elevated debt due to growth investments and privatization is unlikely to reduce meaningfully and should keep Vedanta Resources' cash flow leverage higher than levels commensurate with a B+ rating. On March 8, 2019, S&P Global Ratings revised its outlook on Vedanta Resources Ltd. to negative from stable. At the same time, we affirmed our 'B+' long-term foreign currency issuer credit rating on the India-based commodities producer and our 'B+' long-term issue rating on the various U.S. dollar denominated senior unsecured notes the company issued. The negative outlook reflects the likelihood of

...+ Softer base metal and oil prices and declining but still elevated input costs for aluminum will likely keep Vedanta Resources' profitability and cash flows lower than our previous expectations. + Elevated debt due to growth investments and privatization is unlikely to reduce meaningfully and should keep Vedanta Resources' cash flow leverage higher than levels commensurate with a B+ rating. + On March 8, 2019, S&P Global Ratings revised its outlook on Vedanta Resources Ltd. to negative from stable. At the same time, we affirmed our 'B+' long-term foreign currency issuer credit rating on the India-based commodities producer and our 'B+' long-term issue rating on the various U.S. dollar denominated senior unsecured notes the company issued. + The negative outlook reflects the likelihood of a lower rating on Vedanta Resources over the next nine months if the company's operating performance does not improve more than we expect or and its high debt keeps FFO cash interest coverage sustainably...

Research Update