Skip links

Vedanta – Q2 FY26 Analysis

Author: Published on: Published in: Vedanta (NSE:VEDL)

November 3, 2025 – Vedanta’s Q2 FY26 results confirm its financial structure is fundamentally broken and validates our core thesis. The company’s headline claim of “record revenues” is a smokescreen, obscuring a collapse in free cash flow, eroding margins, and a balance sheet being propped up by new debt.

VRL’s management team continued to stumble on VEDL’s earnings call, seemingly admitting that they do not have an office at their registered office address, appear to be committing tax fraud, and have lost control of the Vedanta PR machine.

  • Dividends Funded Entirely by Debt: VEDL’s free cash flow was negative, with a $1,049m FCF shortfall to dividends paid in FY26 so far. This was funded largely by a $1,093m increase in Gross Debt in the first half of the year.
    • VRL management has finally dropped dividend guidance to 4-5% yield for the next three years. This is a massive cut from the ~17% yield paid since FY22 and a tacit admission that prior payouts were unsustainable and funded by leverage. Vedanta Limited absorbed billions in debt and diluted stock to support VRL.
  • Operational Collapse: The sole “bright spot,” Aluminium, was propped up only by high commodity prices. All other core verticals are failing: Zinc India is being “hollowed out” by related-party deals, Zinc International’s EBITDA fell 12% as it fails to “convert scale to margin”, Oil & Gas is in terminal decline, and the Power segment’s EBITDA halved.
  • Massive Write-Offs & Misleading Disclosures: Management was forced to materialize liabilities it had previously denied. This includes a ₹1,407 crore ($159m) write-off at TSPL, wiping out 39% of its equity.
    • An additional ₹660 crore ($75m), which management previously claimed was a recoverable bank guarantee, was paid to settle the SEPCO dispute, a liability VEDL had hidden from its demerger filings.
  • ‘Brand Fee’ Farce Admitted: We found VRL’s listed London office at 30 Berkeley Square is vacant. On the earnings call, VRL’s CEO admitted the parent company is now operating from Anil Agarwal’s personal residence at 44 Hill Street.
    • It was also admitted that services are rendered by VEDL employees in India. This is a tacit admission that the “brand fees” are a complete “fiction”. We believe this is grounds for tax fraud.
  • Regulatory Scrutiny Intensifies: VEDL formally acknowledged receiving “summons for production of documents from the regulators”, a compulsory legal escalation that directly references concerns raised in Viceroy’s reports.
  • ‘Bait and Switch’ Investments Exposed: Management’s high-profile investment promises have been exposed as hollow PR.
    • The ₹1 lakh crore ($11.2b) Odisha investment was notably absent from management’s long-dated capex guide. It appears to be another “mirage” with no committed timeline.
    • The ₹17,000 crore ($1.9b) JAL acquisition has no detailed plan or rationale, which management refuses to provide until the deal is irreversible.
  • Governance Collapse: In a perfect symbol of VEDL’s failed oversight, the company’s auditor, SR Batliboi, signed off on these disastrous financials from Reykjavik, Iceland.
REPORT DOWNLOAD LINK

SOME OF OUR RECENT WORK

Important Disclaimer – Please read and acknowledge before continuing

Viceroy Research LLC are an investigative financial research group registered in Delaware, USA.

Our research reports have been prepared for educational purposes only and expresses our opinions. Our reports and any statements made in connection with them are the authors’ opinions, which have been based upon publicly available facts, field research, information, and analysis through our due diligence process, and are not statements of fact. All expressions of opinion are subject to change without notice, and we do not undertake to update or supplement any reports or any of the information, analysis and opinion contained in them. We believe that the publication of our opinions about public companies that we research is in the public interest. We are entitled to our opinions and to the right to express such opinions in a public forum. You can access any information or evidence cited in this report or that we relied on to write this report from information in the public domain.

To the best of our ability and belief, all information contained herein is accurate and reliable, and has been obtained from public sources we believe to be accurate and reliable, and who are not insiders or connected persons of the stocks covered herein or who may otherwise owe any fiduciary duty or duty of confidentiality to the issuer. We have a good-faith belief in everything we write; however, all such information is presented “as is,” without warranty of any kind – whether express or implied.

In no event will we be liable for any direct or indirect trading losses caused by any information available on this report. Think critically about our opinions and do your own research and analysis before making any investment decisions. We are not registered as an investment advisor in any jurisdiction. By downloading, reading or otherwise using our research reports, you agree to do your own research and due diligence before making any investment decision with respect to securities discussed herein, and by doing so, you represent to us that you have sufficient investment sophistication to critically assess the information, analysis and opinions in this report. You should seek the advice of a security professional regarding your stock transactions.

This website, all documents contained herein or any information herein should not be interpreted as an offer, a solicitation of an offer, invitation, marketing of services or products, advertisement, inducement, or representation of any kind, nor as investment advice or a recommendation to buy or sell any investment products or to make any type of investment, or as an opinion on the merits or otherwise of any particular investment or investment strategy.

Any examples or interpretations of investments and investment strategies or trade ideas are intended for illustrative and educational purposes only and are not indicative of the historical or future performance or the chances of success of any particular investment and/or strategy.

You should assume that the authors have a direct or indirect interest/position in all stocks (and/or options, swaps, and other derivative securities related to the stock) and bonds covered herein, and therefore stand to realize monetary gains in the event that the price of either declines.

The authors may continue transacting directly and/or indirectly in the securities of issuers covered herein for an indefinite period and may be long, short, or neutral at any time hereafter regardless of their initial recommendation.