Vedanta Iron and Steel Posts 324 Crore Rupee Loss as Operating Profit Grows 56%
Key Facts
Vedanta Iron and Steel Limited reported a post-tax loss of 324 crore rupees in the second quarter of fiscal 2026-2027, compared with a loss of 477 crore in the year-earlier period, while earnings before interest, taxes, depreciation and amortization rose to 83 crore, up 56% year on year. The margin on these earnings was 3%, an increase of 112 basis points, according to the company’s results for the period ended September 30, 2026. The results show a contrast between a continuing net loss and an improvement in operating profitability compared with the same quarter a year earlier. Meanwhile, quarterly revenue fell 2% to 2,788 crore rupees. This comes as the company completed planned shutdowns at its Bokaro and Goa operations, while its future plans focus on increasing production capacity.
The company attributed the weak quarterly performance to lower steel selling prices, a decline in the iron ore index and higher discounts during the quarter. Higher coking coal and fuel costs also weighed on results compared with the previous quarter, according to the results presentation. It said steel volumes were affected by the planned shutdowns, with saleable steel production falling to 532,000 tonnes in the second quarter from 582,000 tonnes in the first quarter. This figure refers to saleable steel production, not total products. Year on year, iron ore production in Odisha rose 34% to 0.9 million dry metric tonnes, while production in Goa increased 22% to 0.1 million dry metric tonnes during the quarter.
For the first half, revenue rose 8% to 6,450 crore rupees and earnings before interest, taxes, depreciation and amortization climbed 54% to 598 crore. The operating margin widened to 9%, an increase of 275 basis points year on year. The post-tax loss narrowed to 203 crore rupees, compared with 622 crore in the first half of the previous fiscal year. The comparison period includes the months starting April 1, 2026, so it extends to before the separation took effect on May 1. The first-half figures therefore reflect the full period from April and are not limited to the months following the separation. The chief executive said the improvement in performance over the six months was based on better steel selling prices, higher volumes and efficiency initiatives.
First-half steel production rose 4% to 1.114 million tonnes, while pig iron production reached 568,000 tonnes, up 4%, marking the company’s highest half-year production of the product. But saleable iron ore production was 4.2 million dry metric tonnes, down 3% from 4.3 million tonnes in the year-earlier period. Steel sales totaled 1.104 million tonnes, up 3% year on year, while iron ore sales, including transfers for internal use, reached 2.8 million dry metric tonnes. The company said its iron ore exports in fiscal 2025-2026 were its highest, qualifying it for the Golden Export Excellence Award from the New Mangalore Port Authority. These figures show diverging trends in steel and iron ore production and sales during the period.
On financing, the company listed its net debt to earnings before interest, taxes, depreciation and amortization ratio at 1.3 times in the results presentation. Capital expenditure in the second quarter totaled 231 crore rupees, while cumulative project spending reached 2,796 crore through the end of September. It also secured 21 megawatts of solar power through open access at ESL Bokaro, with the potential to cut annual emissions by about 50,000 tonnes of carbon dioxide. Crisil assigned the company an AA/Stable credit rating during the second quarter and first half. These indicators put financing, spending and projects at the center of scrutiny of the company’s ability to carry out its expansion plans while it continues to post quarterly losses.
The company’s priorities for fiscal 2027 and 2028 include expanding hot metal capacity in Bokaro from 1.7 million tonnes a year to 3.2 million tonnes a year, along with mine projects in Goa and Karnataka. The company said project timelines remain subject to regulatory approvals. The chief executive had said planned shutdowns in Bokaro and Goa were completed during the quarter to “strengthen asset reliability for the second half.” The company also held a call to discuss its results and performance on October 27, 2026, between 5 p.m. and 5:30 p.m. India time. The expansion plans and related approvals remain among the next milestones that will determine the pace of project execution.