Vedanta Q2 profit drops 59% on one off, analysts question demerger delays and JP bid

Billionaire Anil Agarwal’s metals and mining company Vedanta Ltd reported a sharp decline in profits during the September quarter despite favourable business conditions as it took a one-time write-off in its power business.

The company reported a 59% decline in profit attributable to its owners, to ₹1,798 crore, according to regulatory filings. Revenue from operations rose by almost 6% to ₹39,868 crore—the highest-ever for a second fiscal quarter.

The write-off was in regard to the company’s wholly-owned subsidiary, Talwandi Sabo Power Ltd (TSPL), which had earlier claimed ₹1,407 crore as receivable under a government scheme promoting the development of large power plants. In August 2025, the Supreme Court ruled against TSPL on this claim. The company has filed a review petition.

Separately, TSPL terminated its contract with Sepco in FY24 due to poor performance and subsequent legal disputes. In September 2025, both parties reached a settlement under which TSPL agreed to pay Sepco ₹660 crore to close all claims.

Vedanta reported earnings before interest, tax, depreciation and amortization (Ebitda) of ₹11,612 crore, up 12% from the same period last year.

According to Amit Lahoti, lead analyst for metals and mining at Emkay Institutional Equities, 80% of Vedanta is aluminium, zinc, and silver, and the prices of all these metals are going up, “so overall I am positive on Vedanta. The cost of alumina is also falling, which will add to their margins.”

Shares of the metals and mining major declined by 2.6% to ₹493.60 while the benchmark Sensex remained largely flat, declining by 0.6% on Friday.

Demerger delays

Anil Agarwal's Vedanta finds itself in a difficult spot, as the government opposes its proposed demerger into five separately listed companies. The company's appeal for the demerger is pending before the National Company Law Tribunal (NCLT), amid opposition from the petroleum and natural gas ministry, even as it has missed its revised deadline of September for completing the restructuring.

The management is now confident of completing the demerger by the end of this fiscal year.

“We have also made substantial progress on the proposed demerger, which is a pivotal step towards unlocking further shareholder value,” Deshnee Naidoo, the chief executive officer of Vedanta parent company Vedanta Resources, said during a post-earnings interaction with analysts.

“The final NCLT hearing is scheduled for 12 November, and we expect approvals to follow,” she said.

However, delays could arise as the case needs to be argued again after the NCLT bench, which was hearing the case, was reconstituted.

“The completion of demerger by 31 March depends on the NCLT approval coming by the end of November. Given that the bench hearing the case has been reconstituted, there could be a delay of a month or two, but it would not derail the case for re-rating from demerger,” said Lahoti

Jaiprakash acquisition done deal?

Vedanta expects to succeed in acquiring Jaiprakash Associates Ltd (JAL) from the bankruptcy court after it made the highest bid for the Noida-based company of ₹17,000 crore. Its bid has also been approved by the Competition Commission of India (CCI). The bid of the Adani Group, which was the second-highest, has also received CCI clearance.

Now, the committee of creditors is likely to vote on the final resolution based on the bids, resolution plans and ability to finance the acquisition.

“We think it is highly unlikely that Jaiprakash will go for rebidding, and we feel quite confident that Jaiprakash is coming,” Naidoo said.

Vedanta’s key interest in the bankrupt company was its power assets, Naidoo said. JAL also owns hotels, cement units, land, real estate, and a racing circuit. However, analysts, including Lahoti, remained unconvinced about the company’s rationale for the acquisition.

“If the rationale for the demerger is to simplify the business, then why complicate it again by a complex takeover like this?” the Emkay Global analyst said. Moreover, JAL owns only 24% in JP Power, where the 2.2-MW power assets were housed, so that would further add to the complexity, he said.