Vedanta Q2 results: record ₹6,202 crore profit, net debt cut to ₹3,675 crore (October 28)

Vedanta Q2 results were the loudest set of numbers on a crowded Wednesday. The company reported its highest-ever quarterly profit after tax of ₹6,202 crore for the September quarter, up 151% from ₹2,471 crore a year ago and 17% from ₹5,294 crore in the June quarter, according to its results press release. That profit figure is for continuing operations.

Revenue came in at ₹25,812 crore, 57% higher than ₹16,445 crore a year earlier and 10% above the June quarter. If you saw a ₹26,356 crore revenue number on CNBC-TV18, that is the same quarter with ₹544 crore of other operating income added on top. Both numbers point the same way.

Vedanta Q2 results: where the profit came from

EBITDA hit a record ₹9,938 crore, up 106% year-on-year from ₹4,817 crore and 17% sequentially. The EBITDA margin, which the company calculates excluding its copper business, rose to 60% from 49% a year ago, an improvement of 1,055 basis points. Management put the sequential jump down to favourable market and regulatory factors, higher volumes and marketing gains, partly offset by higher costs. Revenue growth itself was helped by firmer commodity prices, a favourable currency and more volume.

Below the operating line, finance cost fell 9% year-on-year to ₹696 crore, while depreciation rose 19% to ₹1,339 crore, mainly because of higher ore production at Hindustan Zinc. The tax charge rose to ₹2,188 crore from ₹736 crore, and the company said its normalised effective tax rate for the quarter was 26%.

For the first half, profit after tax stood at ₹11,496 crore, up 151%, on revenue of ₹49,268 crore (up 54%) and EBITDA of ₹18,407 crore (up 103%).

The balance sheet story

This is the part we would watch more closely than the headline profit. Net debt fell by ₹4,624 crore in a single quarter, from ₹8,299 crore at the end of June to ₹3,675 crore at the end of September. Net debt to EBITDA improved to 0.1x from 0.3x in the June quarter. Gross debt stood at ₹30,297 crore, while cash and cash equivalents rose to ₹26,622 crore from ₹19,992 crore three months earlier.

The cash came from operations. Free cash flow before capex was ₹5,803 crore in the quarter against ₹4,412 crore in the June quarter, and ₹10,215 crore for the half. Growth capex was ₹1,135 crore in Q2 and ₹2,283 crore for the first half. The board also declared a first interim dividend of ₹5 per share, and ICRA and CRISIL reaffirmed the company’s AA+/Stable rating.

Business by business

• Zinc India: record Q2 mined metal production of 271 kt, up 5% YoY, with silver output up 20% to 173 tonnes. Zinc cost of production fell 29% YoY to $703 a tonne.
• Zinc International: mined metal fell 12% YoY to 53 kt, but Gamsberg Phase II was commissioned, taking total capacity to 500 ktpa.
• Copper: India sales rose 16% to 52 kt, while international sales dropped 74% to 6 kt, which the company linked to the closure of the Strait of Hormuz.
• FACOR: ferrochrome production rose 26% YoY to 24 kt, and the first underground ore came out of the Ostapal mines.

Separately, CNBC-TV18 reported that Vedanta Aluminium posted record production of 649 kilotonnes in the quarter, though its net profit slipped 6% year-on-year to ₹6,187 crore as margins narrowed.

What it means for investors

The quarter leaned heavily on prices and currency, and those can turn. What is harder to argue with is the deleveraging: a balance sheet with almost as much cash as gross debt gives Vedanta room on capex and dividends. Copper International remains the weak spot while the Hormuz disruption lasts. Read this alongside our notes on Hindustan Zinc’s Q2 results, the earlier Vedanta zinc expansion story and SAIL’s Q2 numbers for the wider metals picture.

Sources: Vedanta Limited Q2 FY27 press release; CNBC-TV18.

Disclaimer: This article is for information and education only and is not investment advice. Please do your own research or consult a SEBI-registered adviser before making investment decisions.