VAML Q2 FY27 Results Analysis: PAT Surges 133%, Margin Expands 1,064 bps

VAML's Q2 FY27 numbers came in strong, with revenue of Rs. 22,324.00 Cr (+40.00% YoY) and PAT growth of +105.40% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

VAML delivered 40% YoY revenue growth with EBITDA margin at 45.65% (up 1,064 bps YoY) and normalized owners' PAT up 133% YoY, while the balance sheet transformed with debt-equity at 0.97x vs 2.23x a year ago. H1 CFO of Rs.14,637 crore exceeded PAT, supporting a Rs.8 per share FY27 dividend. The key overhang is the OMC bauxite dispute, with a Rs.3,539 crore demand plus interest and GST pending before the Supreme Court.

Key Investment Insights

Key Positives

• Revenue from operations grew 40.0% YoY to Rs.22,324 crore (+4.4% QoQ)
• EBITDA of Rs.10,192 crore grew 82.6% YoY with margin at 45.65% vs 35.01% a year ago
• Consolidated PAT of Rs.6,187 crore grew 105.4% YoY; normalized owners' PAT of Rs.5,530 crore grew 133.1% YoY
• H1 CFO of Rs.14,637 crore exceeded H1 PAT of Rs.12,784 crore; capex of Rs.2,477 crore comfortably covered
• Debt-equity improved to 0.97x from 2.23x YoY; current ratio improved to 1.49x from 0.89x
• Finance costs fell 4.0% YoY and 9.0% QoQ; interest service coverage rose to 13.94x from 7.23x
• Every major cost line except power and fuel grew slower than the 40.0% revenue growth YoY
• Total FY27 dividend of Rs.8 per Rs.1 share declared; Rs.3,124 crore paid in H1

Risk Factors

• OMC bauxite dispute: High Court dismissed VAML's writ on 1 Oct 2026 and OMC demanded Rs.3,539 crore plus interest and GST; only Rs.400 crore provision booked pending Supreme Court outcome
• Power and fuel charges grew 25.3% YoY and 6.0% QoQ, the only cost line outpacing sequentially
• EBITDA margin compressed 342 bps QoQ from Q1's 49.07% peak
• Inventory build of Rs.573 crore widened Rs.281 crore QoQ, absorbing ~2.6% of revenue
• Reported PAT declined 6.2% QoQ on cost build and Rs.485 crore of exceptional charges