Vedanta – Q1 FY26 Analysis

Author: Viceroy Research Published on: August 5, 2025 Published in: Vedanta (NSE:VEDL)

August 5, 2028 – Vedanta Ltd (VEDL) reported a record Q1 adjusted EBITDA of ₹10,746 crore ($1.3b) on revenues of ₹37,434 crore ($4.4b). This headline performance belies the company’s deep structural weaknesses. Beneath the veneer of profitability lies a balance sheet under stress, with unsustainable dividend payouts, rising leverage, and margin siphoning through opaque promoter-controlled entities. VEDL is being systematically drained by its largest shareholder, Vedanta Resources Limited (VRL) and the Agarwal family.

Record EBITDA masks deeper issues, with no free cash flow to fund capex or dividends; both were covered through asset sales and fresh debt
Offshore oil ambitions are financially unviable; high-risk projects cannot proceed without major dilution or new leverage
Power segment remains loss-making; Meenakshi and Athena operate without long-term PPAs and face cost structures above merchant rates
₹3,247 crore in brand fees diverted to Vedanta Resources, despite no clear services rendered. Capital is being extracted from VEDL, not reinvested
Working capital saw a sharp reversal of ₹3,916 crore, undermining the narrative of stable liquidity and confirming past cash flows were artificially propped up.
Demerger timeline pushed again amid NCLT delays and formal objection from the Ministry of Petroleum and Natural Gas; risk of legal and regulatory blockages remains high
Minority shareholders sidelined as Vedanta prioritizes brand fee remittances to VRL over returning capital to all shareholders equally.
Growing scrutiny from regulators including the ED and SEBI, with increasing attention on related-party transactions, circular funding, and governance failures

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