Vedanta Reports Sharp Profit Decline on Exceptional Losses, Revenue Grows Steadily
Vedanta Ltd reported a steep 59% year-on-year (YoY) decline in consolidated net profit to ₹1,798 crore for the July–September quarter (Q2FY26), impacted by exceptional losses totaling ₹2,067 crore, according to the company’s regulatory filing on October 31.
The diversified natural resources major had posted a net profit of ₹4,352 crore in the same quarter last year.
Despite the profit fall, Vedanta’s total income rose 6% YoY to ₹40,464 crore, up from ₹38,934 crore in Q2FY25, aided by improved production volumes and a recovery in base metal prices.
Before accounting for exceptional items, Vedanta’s net profit after tax rose 13% YoY to ₹5,026 crore, reflecting underlying operational strength across core segments such as aluminium, zinc, and power generation.
Exceptional Charges Weigh on Bottom Line
The sharp decline in profitability stemmed largely from two major exceptional charges booked during the quarter.
Vedanta took a ₹1,407 crore write-off following an adverse Supreme Court ruling related to its Mega Power benefit claim, alongside a ₹660 crore arbitration settlement payment to SEPCO for its Talwandi Sabo power unit.
These one-time charges reduced the consolidated profit, even as operating performance showed resilience.
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Revenue and EBITDA Show Sequential Strength
Vedanta’s Q2 consolidated revenue from operations climbed 6% year-on-year to ₹39,868 crore, supported by higher production across aluminium, zinc, and iron ore divisions.
Operating profitability remained robust, with EBITDA rising 12% YoY to ₹11,612 crore, aided by cost efficiencies and firm global metal prices.
“We delivered record production of Aluminium, Alumina, and Zinc MIC in our international operations, alongside strong Pig Iron and power generation,” said Arun Misra, Executive Director, Vedanta Ltd.
“With this increased production capacity and recovering commodity prices, Vedanta is well positioned to deliver its best-ever performance in FY26,” he added, forecasting EBITDA to surpass the historical peak of USD 6 billion achieved in FY22.
Segment Performance: Aluminium and Zinc Drive Growth
Vedanta’s aluminium segment continued to be the key growth driver, with revenue rising 14% YoY to ₹15,671 crore on the back of strong demand and improved realisations. The segment’s EBITDA surged 33% YoY to ₹5,532 crore, underscoring strong cost discipline and operational efficiency.
The zinc, lead, and silver segment posted 3.5% revenue growth at ₹8,235 crore, supported by resilient domestic demand and lower production costs. The segment’s EBITDA rose 8% to ₹4,434 crore.
Meanwhile, the iron ore business registered a 5.5% jump in revenue to ₹1,449 crore, although its EBITDA declined 21% YoY due to higher input costs.
The oil and gas division, however, saw a 18% drop in revenue to ₹2,330 crore, as declining oil discoveries weighed on output. EBITDA from the segment fell 12% YoY to ₹1,029 crore, with average daily gross operated production down 15% YoY.
Debt Profile and Liquidity Remain Stable
Vedanta maintained a healthy balance sheet despite the exceptional charges.
As of September 30, 2025, the company reported cash and cash equivalents of ₹21,481 crore and gross debt of ₹83,544 crore.
The net debt-to-EBITDA ratio improved to 1.37x, down from 1.49x in the previous quarter, reflecting better operational cash flows and efficient capital management.
Parent company Vedanta Resources Ltd (VRL) also refinanced USD 550 million through a bond issue, lowering overall interest costs from approximately 11.6% to 10%, which is expected to further ease the group’s debt servicing burden.
Stock Reaction: Shares Trade Lower Post Results
Despite operational resilience, Vedanta’s stock fell 2.14% to ₹496.10 per share on the NSE following the results announcement, as investors reacted to the one-time exceptional charges that dented quarterly profit.
Analysts noted that while the near-term profit decline may weigh on sentiment, the company’s improved operational metrics, deleveraging progress, and rising commodity prices offer a constructive medium-term outlook.
Outlook: Recovery in Metals and Strong Production to Support FY26 Growth
Vedanta’s management remains optimistic about the second half of FY26, citing a favourable commodity cycle, higher production guidance, and steady cost reductions.
With aluminium and zinc output at record levels and base metal prices trending upward, Vedanta expects to maintain strong EBITDA momentum, potentially surpassing its historical performance benchmarks.
The company’s ongoing focus on asset optimisation, debt reduction, and volume growth could help sustain profitability even amid global commodity volatility.
