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 fall in profits in the September quarter despite favorable business conditions due to a one-time write-down in its energy business.

The company reported a 59% drop in profit attributable to owners. ₹1,798 crore, according to regulatory filings. Revenue from operations increased by almost 6% ₹39,868 crore – the highest ever in the second fiscal quarter.

This loss was related to the company’s wholly owned subsidiary, Talwandi Sabo Power Ltd (TSPL). ₹It will receive ₹1,407 crore under a government scheme to encourage development of large power plants. In August 2025, the Supreme Court ruled against TSPL on this claim. The company filed a review petition.

Additionally, TSPL terminated its contract with Sepco in FY24 due to poor performance and subsequent legal disputes. In September 2025, both parties reached an agreement in which TSPL agreed to pay Sepco. ₹660 crore to settle all claims.

Vedanta reported earnings before interest, taxes, depreciation and amortization (EBITDA). ₹11,612 crore, an increase of 12% compared to the same period last year.

According to Amit Lahoti, chief metals and mining analyst at Emkay Institutional Equities, 80% of Vedanta consists of aluminium, zinc and silver and the prices of all these metals are rising, “so overall I am positive on Vedanta. The cost of alumina is also coming down, which will increase its margins.”

Shares of the metal and mining sector fell by 2.6 percent ₹It stood at 493.60, while the Sensex benchmark remained largely flat on Friday, down 0.6%.

Division delays

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

Management is now confident of completing the demerger by the end of this financial year.

“We have also made significant progress on the proposed demerger, which is an important step towards delivering greater value to shareholders,” Deshnee Naidoo, CEO of Vedanta Resources, Vedanta’s parent company, said during a post-earnings interaction with analysts.

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

However, there may be delays as the case needs to be discussed again after the NCLT panel hearing the case is reconstituted.

“Completion of the division by March 31 depends on the NCLT approval coming by the end of November. Considering that the bench hearing the case has been reconstituted, there may be a delay of a month or two, but this will not derail the re-rating of the case without division,” Lahoti said.

Has the deal for the acquisition of Jaiprakash been completed?

Vedanta hopes to succeed in acquiring Jaiprakash Associates Ltd (JAL) from the bankruptcy court after placing the highest bid for Noida-based Jaiprakash Associates Ltd (JAL) ₹17,000 crore. Its proposal was also approved by the Competition Commission of India (CCI). Adani Group’s bid, which was the second highest, also received CCI clearance.

The committee of creditors is now expected to vote on the final decision based on the proposals, resolution plans and financing of the acquisition.

“We think it is very unlikely that Jaiprakash will go out to bid again and we are quite confident that Jaiprakash will come,” Naidoo said.

Naidoo said Vedanta’s main interest in the bankrupt company was its energy assets. JAL also owns hotels, cement units, land, real estate and a race track. However, analysts, including Lahoti, were not convinced about the company’s rationale for the acquisition.

“If the logic of the split was to simplify the business, then why are we complicating it again with such a complex acquisition?” Moreover, JAL owns only 24% of JP Power, which houses 2.2 MW of power assets, so this will further increase the complexity, Emkay Global analyst said.