Vedanta Ltd Q2 FY26: Record Revenue & EBITDA, but Exceptional Loss Weighs on Net Profit

Vedanta Ltd Q2 FY26: Record Revenue & EBITDA, but Exceptional Loss Weighs on Net Profit

Vedanta reported a strong operational quarter, delivering its highest-ever Q2 revenue and EBITDA, supported by healthy volumes across aluminium, zinc, and other metal businesses. However, a sizeable exceptional loss linked to the power segment pulled down consolidated net profit sharply. The core business remains solid, but one-off items overshadowed the earnings picture this quarter.

*Key Highlights*
* Consolidated Revenue: ₹39,218 crore (+6% YoY)
* EBITDA: ₹11,612 crore (+12% YoY), the best-ever for Q2
* EBITDA Margin: ~34%, up ~69 bps YoY
* Profit Before Exceptional Items: ₹5,026 crore (+13% YoY)
* Reported PAT: ₹3,479 crore, down ~38–59% YoY due to exceptional losses of ₹2,067 crore
* Net Debt/ EBITDA: Improved to ~1.37x (from 1.49x)

*Revenue & Profit Analysis*
Revenue increased about +6% to roughly ₹39,200 to ₹39,800 crore, marking the strongest Q2 topline in Vedanta’s history. EBITDA grew 12% YoY to ₹11,612 crore, reflecting solid operating leverage and cost discipline despite price volatility in global commodities.
The key drag came from the power business. A one-time exceptional loss of ₹2,067 crore pushed consolidated PAT down to ₹3,479 crore, masking the strength of the underlying operations. In short, the core engine is performing well, but the quarter’s reported earnings were distorted by non-recurring issues.

*Segment/ Operational Performance Highlights*
* Aluminium & Alumina: Cast metal output at 617,000 tonnes and alumina at 653,000 tonnes, both record highs. Segment EBITDA rose to ₹5,532 crore, up ~33% YoY.
* Zinc (India & International): Zinc-India achieved its highest-ever Q2 mined metal production at 258,000 tonnes (+1% YoY). Cost of production remained low at US$ 994/tonne, driving EBITDA up ~8% YoY to ₹4,434 crore.
* Power & Others: Operational volatility in the power business contributed to the exceptional loss, impacting overall profitability.

*Balance Sheet, Debt & Capital Metrics*
Net debt stood at ₹62,063 crore as of 30 Sept 2025, with leverage improving to ~1.37x. The company’s AA credit rating was reaffirmed, underscoring financial stability. Capex for H1 FY26 totalled USD 0.9 bn, signalling ongoing investment in growth and capacity expansion. Even after the exceptional loss, the improvement in leverage shows that underlying cash generation remains strong.

*Management Commentary*
Management highlighted that despite commodity price swings and operational challenges, Vedanta delivered record production across major segments. The exceptional loss from the power subsidiary was acknowledged, but the company believes its diversified portfolio and disciplined balance-sheet approach will help absorb such shocks.

*Conclusion*
Q2 FY26 was a quarter where the core business shone but headline numbers suffered. Strong production, better margins and robust EBITDA growth demonstrate the health of the metals-mining operations, while the one-off power-related loss temporarily depressed net profit. Key things to monitor include movement in aluminium and zinc prices, stability of power and non-metal subsidiaries, and debt levels and capex pace, given ongoing investments. Overall, Vedanta continues to be a strong, diversified business with healthy cash flows. The PAT decline this quarter appears to be a temporary, non-structural issue.

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