Vedanta and 2 other stocks whose EBITDA rose but profits remained dull

Synopsis: Despite rising EBITDA, Vedanta, Tata Communications, and Apollo Tyres reported weaker profits due to restructuring costs, rising employee and input expenses, and other costs below the EBITDA line, impacting overall profitability.

Rising EBITDA often signals stronger operating performance, but it doesn’t always translate into higher net profits. In the latest results, some stocks like Vedanta, Tata Communications, and Apollo Tyres reported healthy EBITDA growth, yet their bottom lines declined. Exceptional items, restructuring costs, tax adjustments, and other expenses below the EBITDA line played a key role in pressuring reported profits.

Vedanta Ltd

Vedanta is a leading natural resources and technology conglomerate in India, driving large-scale portfolio expansion and operational excellence. Over the past two decades, it has supported the Indian economy through job creation and contributions to the national exchequer. 

With a market capitalisation of Rs. 2,35,053 cr, the shares of Vedanta Ltd closed at Rs. 601.10 per share, up from its previous close of Rs. 598.10 per share. The company reported strong EBITDA growth, increasing 16% YoY to Rs. 11,396 cr from Rs. 9,828 cr. Despite this, net profit declined 38% YoY to Rs. 3,479 cr from Rs. 5,603 cr.

For Q2 FY26, the company reported a net exceptional loss of Rs. 2,067 cr, primarily due to trade receivables written off (Rs. 1,407 cr) and capital creditor settlements (Rs. 660 cr). After accounting for deferred tax benefits of Rs. 520 cr, the net exceptional loss, post-tax, stood at Rs. 1,547 cr, significantly impacting the reported net profit for the quarter.

Tata Communications Ltd

Tata Communications Ltd is a global digital ecosystem enabler providing network, cloud, security, IoT and collaboration services to enterprises, carriers and governments. Backed by the Tata Group, it operates one of the world’s largest submarine cable networks and focuses on data-driven, cloud-first and digital transformation solutions.

With a market capitalisation of Rs. 50,755 cr, the shares of Tata Communications Ltd closed at Rs. 1,780.90 per share, up from its previous close of Rs. 1,771.60 per share. The company reported EBITDA growth of 4% YoY to Rs. 1,174 crore. However, net profit declined 18% YoY to Rs. 183 crore.

The company recognised an exceptional provision of Rs. 185.52 crore for interest and additionally recorded a net tax provision of Rs. 21.09 crore due to the adjustment in the effective tax rate following the adoption of the new tax regime.

Apollo Tyres Ltd

Apollo Tyres Ltd is a global tyre manufacturer producing tyres for passenger vehicles, commercial vehicles, and two-wheelers. With manufacturing facilities in India and abroad, the company serves domestic and international markets under the Apollo and Vredestein brands. With a market capitalisation of Rs. 32,107 cr, the shares of Apollo Tyres Ltd closed at Rs. 505.55 per share, down from its previous close of Rs. 511.65 per share.

For the quarter ended Q2FY26, the company reported EBITDA increased to Rs. 1,021 crore, up 16% YoY from Rs. 878 crore, indicating improved operating performance. Net profit stood at Rs. 258 crore, reflecting a 13% year-on-year decline compared to Rs. 297 crore.

In the current quarter’s results for the Europe operations, the exceptional item reported below the EBITDA level pertains to an additional estimated restructuring cost of approximately EUR 17 million. This cost arises from the settlement reached with the Works Council to proceed with the planned closure of the Enschede production facility.

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