Vedanta Reports Doubling of Q2 Net Profit to ₹3,650 Crore on Improved Realisations

Diversified metal and mining company Vedanta has reported a more than twofold increase in its net profit attributable to owners, reaching ₹3,650 crore for the September quarter. In the corresponding period of the previous financial year, the company had recorded a net profit of ₹1,798 crore. The earnings growth was supported by improved realisations across businesses.

Revenue for the quarter increased by 57 per cent to ₹25,812 crore, compared to ₹16,445 crore in the same period last year. Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) also more than doubled to ₹9,938 crore, bolstered by higher metal prices. Additionally, the company’s zinc cost of production dipped by 29 per cent to $703 a tonne following its transition to underground mining.

Ajay Goel, Group CFO of Vedanta, stated that the profit was boosted by favourable metal prices, operational efficiency improvements, and currency depreciation. He noted that operational efficiencies contributed about 15 to 20 per cent of the profit growth, while the remaining share was driven by the favourable macroeconomic environment.

"We expect the remaining quarters in this fiscal to be more profitable than the first half due to strong demand worldwide and the demand-supply gap is structural," Goel said, adding that while the global environment remains uncertain, pricing will stay high due to supply constraints.

On the debt front, Goel mentioned that debt levels decreased by ₹9,584 crore in the first half of the fiscal year. The net debt-to-EBITDA ratio improved to 0.1 times, bringing the company close to being debt-free. The gross debt on the books stood at nearly ₹15,000 crore against a cash surplus of about ₹12,000 crore, leaving a net debt of ₹3,000 crore.

Arun Mishra, CEO of Vedanta, commented on long-term margins, stating that margins in the company's commodity business typically range between 40 and 50 per cent over the long term. He added that cost pressures peaked around the start of the West Asia war but have since remained under control as companies adapted to manage costs despite the crisis.

Looking ahead, Mishra noted that the company expects EBITDA to improve following the monsoon season, supported by increased coal supply from Coal India that will lower costs in upcoming quarters.

"Vedanta’s latest financial performance highlights the significant impact of operational efficiency combined with a favorable macroeconomic environment in the commodities sector. Reducing debt levels significantly while expanding margins demonstrates strong balance sheet management. For businesses across sectors, maintaining a sharp focus on cost control and structural demand-supply dynamics remains a reliable blueprint for weathering global market uncertainties and driving sustained profitability." — Dr. Shishir Gupta, Founder & CEO, StartupLanes