Vedanta Power Limited reported a consolidated net loss of ₹423 crore for the first quarter ended June 30, 2026, reversing the net profit of ₹88 crore recorded in Q1FY26. The bottom-line deterioration was primarily driven by an exceptional loss of ₹487 crore, which included a ₹127 crore penalty imposed by the Supreme Court. Despite the net loss, operational performance strengthened significantly, with revenue from operations rising 31% year-on-year to ₹2,607 crore and power sales surging 38% to 5,224 million units. This operational resilience was further underscored by credit rating upgrades from CRISIL to AA+ (CE)/AA- and ICRA to AA-/A1+, reflecting improved creditworthiness.

The Board of Directors approved the unaudited consolidated and standalone financial results at a meeting held on July 29, 2026. Statutory auditors Walker Chandiok & Co. LLP issued an unmodified opinion on the financial statements following a limited review in accordance with Regulation 33 and Regulation 52(4) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The comparative figures for preceding periods have been restated to reflect the demerger of the Merchant Power Undertaking from Vedanta Limited, which became effective on May 1, 2026.

Financial Performance Highlights

Consolidated revenue from operations stood at ₹2,607 crore in Q1FY27, up from ₹1,986 crore in Q1FY26. Other income contributed ₹9 crore, bringing total income to ₹2,616 crore. EBITDA for the quarter was ₹291 crore, down from ₹417 crore in the same period last year. The EBITDA margin contracted to 11.21% from 21.05% year-on-year, indicating margin compression despite higher top-line growth. The company incurred power and fuel charges of ₹2,063 crore and finance costs of ₹196 crore.

The following table summarises key consolidated financial metrics across comparable periods:

On a standalone basis, Vedanta Power reported a net loss of ₹449 crore, compared to a net profit of ₹75 crore in Q1FY26. Standalone revenue from operations was ₹1,836 crore, up from ₹1,725 crore in the prior year. Standalone EBITDA was ₹179 crore, down from ₹380 crore in Q1FY26.

Operational Strengths and Rating Upgrades

Power sales jumped 38% year-on-year to 5,224 million units, propelled by enhanced generation across key assets. Meenakshi Energy Limited achieved its highest-ever quarterly EBITDA of ₹112 crore (+20% QoQ), selling 1,350 MU (+16% QoQ). The company is transitioning Meenakshi Energy from imported to 100% domestic coal to improve margins and reduce geopolitical risks. Talwandi Sabo Thermal Plant (TSTP) saw its Plant Availability Factor (PAF) rise from 77% to 86%, while also doubling ash revenues year-on-year through improved sales realization. TSTP consumed nearly 8% biomass co-firing, the highest in Punjab, avoiding 1.37 lakh tonnes of CO2 emissions.

Credit rating agencies upgraded Vedanta Power’s outlook based on its healthy liquidity position of ₹1,130 crore in cash equivalents and strong long-term coal security covering 85% of requirements. CRISIL upgraded the rating to AA+ (CE)/AA-, while ICRA raised it to AA-/A1+ from A+/A1. The company also listed 6,000 Commercial Papers with a face value of ₹5,00,000 each on the NSE debt segment on June 22, 2026.

What the Numbers Show

The divergence between strong revenue growth and widening losses highlights the significant drag from non-operational factors. While operating revenue surged 31% year-on-year due to the expanded asset base post-demerger, the EBITDA margin nearly halved to 11.21% from 21.05%, suggesting lower operational efficiency or higher input costs in the initial post-restructuring quarter. The debt service coverage ratio fell to 0.80 times from 1.49 times in the previous year, signaling tighter cash flow dynamics as the company integrates new assets and manages debt obligations. However, the upgrade in credit ratings suggests that lenders view the long-term structural improvements and liquidity buffer favorably despite short-term margin pressures.

The Board of Directors of vedanta power approved the formulation and adoption of the VEDPOWER Employee Stock Option Plan 2026 ("VEDPOWER ESOP 2026") and the VEDPOWER Employee Share Purchase Plan 2026 ("VEDPOWER ESPP 2026") on July 29, 2026. These schemes allow eligible employees to acquire equity shares representing up to 5% of the company's total paid-up share capital, aiming to align employee interests with long-term value creation. The implementation will proceed through a trust route, subject to shareholder approval.

The approval was granted at a board meeting held on July 29, 2026, based on the recommendation of the Nomination & Remuneration Committee (NRC). The disclosure was made under Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with SEBI circular HO/49/14/14(7)2025-CFD-POD2/I/3762/2026 dated January 30, 2026. The schemes comply with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.

Scheme Structure and Allocation

The two schemes are designed to be implemented through the Vedanta Power Limited ESOS Trust ("VEDPOWER Trust"). The Trust will acquire existing equity shares from the open market via secondary acquisition. The aggregate number of shares held by the Trust under all outstanding schemes must not exceed 5% of the paid-up equity share capital at any point in time.

Eligibility and Terms

Eligibility extends to employees of the company, its holding company, and subsidiaries. Promoters, the promoter group, independent directors, and individuals holding more than 10% equity are excluded from participation.

Under the ESOP scheme, options vest based on performance parameters set by the NRC, with a minimum vesting period of one year and a maximum of five years from the grant date. Once vested, options must be exercised within eight months. The exercise price is proposed at the face value of ₹ 10 per share, though the NRC may approve an alternative price. No grants have been made under the ESOP scheme as of the announcement date.

For the ESPP scheme, the NRC determines the quantum of shares and other terms. The purchase price may be nil or set by the NRC. Shares transferred to employees under this plan carry a lock-in period of one year from the date of transfer. No offers have been made under the ESPP scheme as of the announcement date.