Vedanta Shares Crash 8% Despite Reporting 124% QoQ Net Profit Increase; Here’s the Reason

Synopsis: Vedanta fell sharply today despite revenue grew 17% QoQ and profit jumping by a staggering 124% QoQ. The drop came because of increased selling sentiment across key metal commodities with Vedanta’s sale of shares in Hindustan Zinc via OFS.

The shares of this leading conglomerate, engaged in the exploration, production and sale of zinc, lead, silver, copper, aluminium, iron ore and oil & gas, are in focus after it reported a sharp plunge in today’s trade despite profits growing by a staggering 124 percent on a QoQ basis. In this article, we will try to understand it in detail.

With a market capitalisation of Rs 2,79,592 crore, the shares of Vedanta Ltd reached a day low of Rs 702.40 per share, down 8 percent from its previous day’s closing price of Rs 766.10 per share. Over the past five years, the stock has delivered a robust 342 percent return, outperforming NIFTY 50’s return of 86 percent.

Q3 Highlights

The revenue from operations for Vedanta stands at Rs 45,899 crores in Q3 FY26 compared to Q3 FY25 revenue of Rs 38,526 crores, up by 19 per cent YoY. Additionally, on a QoQ basis, it reported a growth of 17 percent from Rs 39,218 crore, making it one of the best-ever quarterly revenue records achieved by the company.

Also, EBITDA stood at Rs 15,171 crore in Q3 FY26, a robust growth of 34 percent as compared to Rs 11,284 crore in Q3 FY25. Additionally, on a QoQ basis, it reported a growth of 31 percent from Rs 11,612 crore. Also, coming to the margins front, EBITDA margins increased by a staggering 600 bps YoY and by 700 bps QoQ, reaching 41 percent in Q3 FY26.

Coming down to its profitability, the company reported its highest-ever quarterly net profit, which stood at Rs 7,807 crore in Q3 FY26, a robust growth of 60 percent as compared to Rs 4,876 crore in Q3 FY25. Additionally, on a QoQ basis, it reported a staggering growth of 124 percent from Rs 3,479 crore.

Reason behind the plunge

The sharp fall mainly comes down to a significant fall in key commodity prices today, where Copper futures fell by around 4 percent in MCX, while silver dropped nearly 6 percent. Such declines usually unsettle investors throughout the metals sector, and Vedanta was hit particularly hard since its earnings are closely linked to the price of these commodities. With the dip, concerns grew about Vedanta’s near-term earnings potential, leading many investors to lock in profits after the recent rally.

Additionally, Vedanta sold a 1.13 percent stake in Hindustan Zinc Ltd (HZL) through an Offer for Sale (OFS) on January 28–29, 2026 which reduced Vedanta’s stake in HZL to 60.71 percent and increased the number of shares in the market, further adding to the selling pressure and pushing the stock down even more.

Segmental highlights

• Aluminium: Vedanta set new records in alumina production, reaching 794 kt, up 57 percent from last year and 22 percent from the previous quarter. Aluminium cast metal output also hit a new high at 620 kt, a 1 percent increase year-on-year. The company achieved significant cost reductions, lowering the cost of production to $1,674 per tonne, which is 11 percent less than last year and 8 percent lower than last quarter, highlighting notable efficiency gains.
• Zinc India: Zinc India posted its highest-ever Q3 mined metal production at 276 kt, up 4 percent from a year earlier and 7 percent from the previous quarter. Refined metal production reached a new quarterly record at 270 kt. Production costs dropped to a five-year low, with the cost per tonne at $940, down 10 percent from last year.
• Zinc International: The international zinc segment gained momentum as well. Mined metal production rose 28 percent year-on-year to 59 kt. The Gamsberg mine performed particularly well, with output up 40 percent to 49 kt.
• Oil & Gas: Oil and gas production remained steady, averaging 84.9 thousand barrels of oil equivalent per day for the quarter.
• Iron Ore and Facor: Iron ore output at IOK was 1.2 million tonnes, increasing 3 percent over last year and 25 percent over the previous quarter. IOG produced 0.4 million tonnes, up 7 percent year-on-year. Facor’s ferrochrome production rose 32 percent to 24 kt.
• Steel and Copper: Steel production remained strong at 325 kt, up 19 percent from last quarter. Copper cathode output was stable compared to last year at 45 kt, but increased 12 percent over the previous quarter.
• Power: Power sales surged 61 percent year-on-year, driven by the new Athena and Meenakshi power plants starting up and increasing the company’s total generation capacity.

Analyst Comments

Investec believes Vedanta’s recent drop is more about weak market sentiment than any major issue with the company itself, and they have raised their price target to Rs 930 (31 percent upside). The brokerage expects the metals downturn to be temporary and thinks Vedanta’s upcoming demerger, solid assets, and potential dividends will soon bring more value.

Citi continues to recommend a “buy” and has raised its target price to Rs 900 from Rs 585 (27 percent upside) after the company’s Q3 results surpassed expectations. They highlighted stronger commodity prices, robust volumes, and favourable forex movements as key drivers of the Ebitda increase. Additionally, they believe the upcoming demerger could help unlock further value.

Motilal Oswal is less bullish, maintaining a neutral rating with a target of Rs 810 (14 percent upside). While they acknowledge that improved prices and volumes boosted earnings, they cautioned about the stock’s elevated valuation, as it is trading at 7 times FY27 EV/Ebitda and 4.4 times price-to-book.

Demerger Updates

Vedanta’s executives announced that the company will be split into five publicly listed entities, with the demerger taking effect on April 1 and trading of the new shares expected to begin by May 2026. The new structure will include Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Iron & Steel, and Vedanta Ltd, the last of which will house the zinc and silver businesses.

The group’s significant net debt of Rs 60,624 crore will be divided among the new companies based on their valuations and cash flow generation. Vedanta Aluminium will take on the largest share of the debt, followed by Vedanta Power and Vedanta Ltd. The Oil & Gas and Iron & Steel businesses will remain nearly debt-free to keep their financial positions strong.

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