Vedanta Power Q1 FY27 Results (NSE: VEDPOWER)
Signal: Slipped to loss
The read
Q1FY27 was a challenging quarter for Vedanta Power: consolidated revenue jumped 31.3% YoY to ₹2,607 Cr driven by the inclusion of the demerged merchant power business from Vedanta Ltd, but a severe cost headwind (power & fuel charges surging to 79.1% of revenue from 71.8%) and a ₹487 Cr exceptional penalty from the Supreme Court for mis-declaration of capacity resulted in a consolidated net loss of ₹423 Cr. Excluding the exceptional, operating PAT would have been ~₹64 Cr, still sharply lower than the restated ₹88 Cr of Q1FY26 due to fuel cost pressures. The company's operational leverage is under duress, with the interest coverage ratio falling to 1.28x and debt service coverage to 0.80x, signaling heightened financial risk. The demerger from Vedanta Ltd and subsequent listing in June 2026 create a new equity base, but the near-term trajectory hinges on fuel cost normalization and resolution of the Supreme Court penalty.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹2,607 Cr | 31.3% | -2.9% |
| EBIT | ₹104 Cr | -60.9% | |
| Net profit | ₹-423 Cr | -580.7% | |
| EPS | ₹-1.08 | -569.6% | |
| EBIT margin | 2.53% |
P&L walk
Revenue grew 31.3% YoY to ₹2,607 Cr, but power & fuel charges surged to ₹2,063 Cr (79.1% of revenue vs 71.8% a year ago), compressing operating profit before exceptional to ₹104 Cr (-60.9% YoY). A ₹487 Cr exceptional loss for a Supreme Court penalty on declared capacity drove the bottom line to a net loss of ₹423 Cr vs profit of ₹88 Cr in Q1FY26, making it an operationally stressed quarter masked by a demerger-related base restatement.
Segments
Single segment 'Generation of Power' per the filing; no segment split available. The consolidated results include Meenakshi Energy Ltd (subsidiary), which contributed ₹771 Cr of additional revenue over standalone (₹2,607 Cr consolidated vs ₹1,836 Cr standalone) and reduced the net loss by ₹26 Cr (consolidated net loss ₹423 Cr vs standalone ₹449 Cr), indicating the subsidiary was marginally profitable or had lower exceptional items.
Key positives
- Revenue grew 31.3% YoY to ₹2,607 Cr, reflecting the expanded scale post-demerger of Vedanta Ltd's merchant power business.
- Net worth remains strong at ₹13,077 Cr despite the quarterly loss, providing a cushion for debt servicing.
- The statutory auditors issued an unmodified (clean) opinion on both standalone and consolidated results.
Key concerns
- Power & fuel charges surged to 79.1% of revenue (vs 71.8% YoY), crushing operating margins — operating profit margin fell to 2.53% from 12.49% a year ago.
- Exceptional loss of ₹487 Cr from a Supreme Court penalty on mis-declaration of capacity wiped out operating profits; the group is pursuing legal remedies but the cash outflow is pending.
- Interest service coverage ratio slumped to 1.28x (vs 2.91x a year ago); debt service coverage fell below 1x (0.80x), indicating strained debt-servicing capacity.
- A boiler incident at the Sakti plant on 14 April 2026 (Unit 1) — while management says no material impact, it adds operational risk to thermal generation.
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