Vedanta Q2 earnings decline as commodity slump hits margins, EBITDA drops 21%

Oil & Gas segment and commodity price fall impact overall performance despite tax adjustments*

Revenue and profit figures reflect sectoral challenges

Vedanta Ltd. posted consolidated revenue of Rs 35,645 crore in Q2 FY25, marking an 8.5 percent year-over-year decline from Rs 38,945 crore, due to persistent commodity price pressures. EBITDA dropped by 21 percent to Rs 9,087 crore, down from Rs 11,479 crore, with margins contracting to 25.5 percent from the previous year’s 29.5 percent.

The company recorded a net profit (PAT) of Rs 2,672 crore, a substantial recovery from a loss of Rs 1,783 crore in the same quarter last year. However, this improvement was largely influenced by significant adjustments, including an exceptional expense of Rs 6,128 crore related to the adoption of a new tax regime and a favourable arbitration outcome contributing Rs 1,223 crore in exceptional income, according to Zee Business estimates.

Oil and Gas segment faces QoQ EBITDA decline

The Oil & Gas segment's performance was notably weaker, with EBITDA anticipated to fall around 7 per cent quarter-over-quarter due to the decline in crude oil prices and other global market pressures. This segment’s lower earnings contributed to the overall dip in EBITDA.

Commodity prices weigh on performance

Weakness across core commodity prices—including oil, metals, and other raw materials—has been a central challenge for Vedanta. Falling commodity values have not only hurt revenue but also squeezed profit margins, dampening the impact of any operational efficiencies.

Exceptional items and tax adjustments

In this quarter, Vedanta had to account for significant exceptional items. Last year’s net loss was partly due to the adoption of the new tax regime, which led to an exceptional expense of Rs 6,128 crore. Additionally, Vedanta benefited from a favourable arbitration ruling, adding Rs 1,223 crore to exceptional income—a one-time benefit not expected to recur in the coming quarters.

Stock performance

Shares of Vedanta closed at Rs 457.95, reflecting a decline of 3.39 per cent for the day. This drop mirrors broader investor caution, stemming from continued volatility in commodity markets and the company’s profitability outlook amid fluctuating global prices.