Vedanta Iron & Steel H1FY27 Results (NSE: VISL)
Signal: Margin expansion
The read
The H1 trajectory is an operating recovery, with EBITDA up 54% to ₹598 crore and margin up 275bps to 9% as steel realisations, volumes and efficiency improved; the near-term inflection is less secure because Q2 margin dropped to 3% from 12% in Q1FY27 on weaker realisations, higher coking coal and fuel costs, seasonality and planned shutdowns.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹6,450 Cr | +8% | N/A |
| Net profit | ₹-203 Cr | N/A | |
| EBIT margin | 9% |
P&L walk
H1 revenue increased 8% to ₹6,450 crore and EBITDA rose 54% to ₹598 crore as steel and iron ore realisations, steel volumes and efficiency improved; however, Q2 EBITDA fell sequentially to ₹83 crore from ₹515 crore because of weaker realisations, higher coking coal and fuel costs, seasonal effects and planned shutdowns.
Segments
Steel was the consolidated earnings driver: its H1 revenue rose 17% to ₹5,327 crore and EBITDA rose 207% to ₹409 crore, while Iron Ore EBITDA fell 26% to ₹189 crore as net revenue declined 19% to ₹1,027 crore.
Key positives
- H1 EBITDA increased 54% YoY to ₹598 crore and EBITDA margin expanded 275bps to 9%, reflecting better steel and iron ore realisations, higher steel volumes and efficiency improvements.
- Steel was the main earnings engine: H1 steel EBITDA rose 207% to ₹409 crore while steel production increased 4% to 1,114 KT and sales increased 3% to 1,104 KT.
- Finance cost declined 58% YoY to ₹378 crore after inter-company payable settlements, supporting the reduction in H1 loss from ₹622 crore to ₹203 crore.
- Net external debt remained contained at ₹1,790 crore and net debt/EBITDA was 1.3x despite ₹300 crore of H1 growth capex.
- The company secured 21 MW of open-access solar power at ESL Bokaro, with stated annual emission-reduction potential of approximately 50,000 tons of CO2.
Key concerns
- Q2 EBITDA margin was only 3%, down from 12% in Q1FY27, as weaker steel realisations, higher coking coal and fuel costs, seasonal effects and planned shutdowns reduced quarterly profitability.
- Q2 revenue declined 2% YoY to ₹2,788 crore and Q2 PAT was a loss of ₹324 crore versus a loss of ₹477 crore in Q2FY26, showing that the H1 recovery remains uneven.
- Iron ore production declined 3% YoY to 4.2 Mn DMT and iron ore net revenue fell 19% to ₹1,027 crore; iron ore EBITDA declined 26% to ₹189 crore.
- The company remained loss-making at H1 PAT of -₹203 crore, with a ₹37 crore exceptional charge further reducing reported earnings.
Research and educational content only. Not investment advice.