Vedanta Oil and Gas margin jumps as quarterly expenses fall sharply
Consolidated operating margin rose 21.83 percentage points sequentially, but net profit fell as the prior quarter benefited from a tax credit.
Filed 29 Oct 2026, 16:27 IST · after market close · Vedanta Oil and Gas Ltd (VOGL)
Key takeaways
- Operating margin widened 21.83 percentage points sequentially as expenses fell 32.84% while revenue slipped 0.76%.
- Net profit fell 21.06% sequentially to Rs 746 cr despite operating profit rising 65.97%, partly because Q1 included a Rs 175 cr tax credit.
- The 54.30% operating margin was 38.72 percentage points above the 15.58% median for 10 reported energy peers.
Price around the results
Lower expenses drove the operating recovery
Consolidated revenue was broadly flat sequentially, declining 0.76%, while expenses fell 32.84%; the mismatch lifted operating profit 65.97% and widened operating margin by 21.83 percentage points. Lower interest expense, down 37.27%, and depreciation, down 12.69%, also supported the move from a Q1 pre-tax loss of Rs 327 cr to Q2 pre-tax profit of Rs 775 cr.
Tax and other income complicate the profit comparison
Net profit declined 21.06% sequentially even as pre-tax profit turned positive, because Q1 included a Rs 175 cr tax credit while Q2 reported Rs 29 cr of tax. The tax rate fell to 3.74%, a 49.78 percentage-point decline, which supported Q2 earnings. Other income of Rs 140 cr contributed 18.06% of pre-tax profit, so reported profit was not entirely driven by operations.
Margin was well above the energy-peer median
Vedanta Oil and Gas's 54.30% operating margin was 38.72 percentage points above the 15.58% median among 10 energy peers that had reported the quarter. The presentation said average daily gross operated production was 72.2 kboepd in Q2FY27, with working-interest production at 47.8 kboepd. Management said well interventions and artificial-lift optimisation were being used to maximise recovery from mature Rajasthan and Ravva assets.
Management highlighted exploration and domestic expansion
Management said the company aims to significantly expand domestic production and is advancing projects across the East Coast, Rajasthan North and the Northeast. It said upcoming deepwater exploration, full-phase ASP injection in Rajasthan North and Northeast exploration campaigns are expected to unlock future growth potential. The company also reported three discoveries in the Rajasthan block during the first half and said it was awarded two offshore Krishna Godavari Basin blocks.
Results were filed after market close
The company filed these consolidated results after market close on 29 October 2026. The quarter's reported market reaction is therefore not covered here.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹2,488 cr | ₹2,507 cr | -0.76% |
| Other income | ₹140 cr | ₹-290 cr | — |
| Expenses | ₹1,137 cr | ₹1,693 cr | -32.84% |
| Operating profit | ₹1,351 cr | ₹814 cr | +65.97% |
| Operating margin (%) | 54.30% | 32.47% | — |
| Interest | ₹69 cr | ₹110 cr | -37.27% |
| Depreciation | ₹647 cr | ₹741 cr | -12.69% |
| Profit before tax | ₹775 cr | ₹-327 cr | — |
| Tax | ₹29 cr | ₹-175 cr | — |
| Net profit | ₹746 cr | ₹945 cr | -21.06% |
| EPS (₹) | ₹1.91 | ₹2.42 | -21.07% |
Operating margin of 54.30% compares with a Energy sector median of 15.58% across 10 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Average daily gross operated production was 72.2 kboepd in Q2FY27, while working interest production was 47.8 kboepd.
- The exploration campaign delivered three discoveries in the Rajasthan block during the first half of the year.
Guidance & outlook
- The company aims to significantly expand domestic production to support India’s energy security and economic growth.
- The company expects upcoming deepwater exploration, ASP injection and Northeast exploration to unlock future growth potential.
Expansion
- The company is advancing exploration and development projects across the East Coast, Rajasthan North and Northeast.
- The company plans deepwater exploration on the East Coast, full-phase ASP injection in Rajasthan North and exploration campaigns in the Northeast.
- The company was awarded two offshore blocks in the Krishna Godavari Basin under the DSF IV bid round.
New orders
- The company was awarded blocks KG/OSDSF/G1/2025 and KG/DWDSF/GD10/2025 in the Krishna Godavari Basin.
New initiatives
- Well interventions and continuous artificial lift optimisation programmes are being used to maximise recovery from mature assets.
- The company is using advanced technologies and efficient project execution to pursue offshore growth and untapped hydrocarbon potential.
What to watch
- Whether operating margin holds near 54.30% in the next reported quarter.
- The next reported average daily gross operated production against 72.2 kboepd.
- Whether other income remains close to 18.06% of pre-tax profit.