Vedanta Limited shares dropped over 8% on Friday, January 30, 2026, closing at Rs 702.40, a significant fall from its previous close of Rs 766.10. This sharp decline occurred despite the mining and metals conglomerate reporting a 60% jump in consolidated profit after tax (PAT) for the third quarter of fiscal year 2026, which ended December 31, 2025. Investors reacted to profit booking and broader market trends in the metal sector.[businesstoday+3]
Strong Q3 Performance Across Businesses
Vedanta announced a consolidated PAT of Rs 7,807 crore for the December quarter, a substantial increase from the Rs 4,876 crore reported in the same period last fiscal year.The company's consolidated revenue from operations also saw a healthy rise of 19% year-on-year, reaching Rs 45,899 crore.Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) hit a record Rs 15,171 crore, up 34% from the previous year, with EBITDA margins expanding to 41%.[businesstoday+9]
Operational highlights show strong performance across key segments. The aluminium business achieved its highest-ever EBITDA margin of $1,268 per tonne, driven by record alumina and aluminium production.Alumina production soared 57% year-on-year to 794 kilotonnes, and the cost of aluminium production decreased by 11% to $1,674 per tonne.Zinc India reported its best-ever quarterly EBITDA of Rs 6,064 crore, with silver contributing 44% to its overall profit.Mined metal production at Zinc India increased by 4% to 276,000 tonnes, while Zinc International saw a 28% rise in production to 59,000 tonnes.[samco+10]
Vedanta's Oil & Gas business achieved a milestone with India's first subsea template installation.The Thermal Power business also showed robust growth, with EBITDA increasing by 188% year-on-year and sales volumes rising by 62%.[samco+1]
Why Shares Declined
Despite these impressive financial and operational results, Vedanta's stock experienced a significant downturn. Analysts point to a combination of factors. Many investors engaged in profit booking after the stock had enjoyed a six-day winning streak leading up to the earnings announcement.[samco+1]
A broader market trend also impacted the shares. The global metal sector witnessed a downturn, with the Nifty Metal index falling nearly 5% on the same day.This general weakness in commodity prices contributed to the sell-off. Brokerages also expressed caution regarding the company's valuation, suggesting that much of the near-term optimism was already factored into the stock price.[samco+1]
Analyst Views and Future Outlook
Some brokerages, like Systematix, maintain a 'buy' rating on Vedanta, setting a target price of Rs 898 per share.However, Motilal Oswal kept a 'Neutral' rating with a target price of Rs 810.Motilal Oswal acknowledged Vedanta's strong Q3 operational performance, which was in line with expectations, supported by favorable prices, increased volumes, and lower costs.They also raised their FY26 revenue, EBITDA, and PAT estimates for Vedanta.However, they noted that the stock's current valuation already reflects much of the near-term positive sentiment.[businesstoday+4]
Vedanta's balance sheet showed improvement, with net debt declining to Rs 60,624 crore as of December 31, 2025.The net debt-to-EBITDA ratio improved to 1.23 times, down from 1.40 times a year ago.This deleveraging is a positive sign for the company's financial health. Vedanta's management expressed optimism, with Executive Director Arun Misra stating, "Q3 FY26 has been a landmark quarter for Vedanta, delivering our highest-ever EBITDA of ₹15,171 crore, with two of our businesses achieving their best-ever financial results." Chief Financial Officer Ajay Goel added that the company is entering an "exciting phase of growth and value unlocking."[upstox+6]
The company's planned demerger is also a key focus for investors. This restructuring aims to unlock value and address the conglomerate discount typically applied to diversified companies. The demerger process is expected to be completed by March 2026 or the second quarter of fiscal year 2027. Analysts believe this move could significantly improve how the market views Vedanta's balance sheet strength and capital allocation.[upstox+2]
Despite the immediate share price correction, the company's strong operational performance and ongoing strategic initiatives, including deleveraging and the demerger, suggest a positive long-term outlook for Vedanta.[ndtvprofit]
