Strong metal prices help Hindustan Zinc kick off FY27 on a high note
Hindustan Zinc also reported its lowest quarterly zinc cost of production, excluding royalty, since shifting to underground mining, helping further lift profitability.
Summary
Hindustan Zinc also reported its lowest quarterly zinc cost of production, excluding royalty, since shifting to underground mining, helping further lift profitability.
Mumbai: Hindustan Zinc kicked off the financial year on a strong note, as higher metal prices, a weaker rupee and increased production helped India's largest zinc and silver producer beat Street estimates and post a more than two-fold jump in first-quarter profit.
Vedanta Group's biggest cash generator posted a consolidated net profit of ₹5,469 crore for the quarter ended 30 June, up from ₹2,234 crore a year earlier, according to exchange filings. The net income exceeded the Bloomberg consensus estimate of ₹5,052 crore based on a poll of six analysts.
Revenue from operations surged 77% year-on-year to a record ₹13,747 crore, driven by higher metal production, stronger prices for zinc and silver, and the sale of lead concentrate. Earnings before interest, tax, depreciation and amortisation (Ebitda) more than doubled to an all-time high of ₹8,074 crore, while the Ebitda margin expanded to 59% from 50% a year ago.
The company's strong showing came as benchmark zinc prices averaged $3,466 per tonne during the quarter, while a weaker rupee boosted realizations.
Hindustan Zinc also reported its lowest quarterly zinc cost of production, excluding royalty, since shifting to underground mining, helping further lift profitability.
"We are pleased to begin FY27 with a strong quarter marked by solid operational and financial performance and continued execution of our strategic priorities," Arun Misra, chief executive officer and whole-time director, said during the post-results earnings call.
Change of guard
The Vedanta Group company has appointed Amarendu Prakash, former chairman and managing director of Steel Authority of India, as the new CEO starting 1 August. Outgoing CEO Arun Mishra, in his interaction with analysts, said that having worked with Prakash, he is confident that “his vision, deep industry expertise and proven leadership will guide the company to even greater heights”.
Mint first reported that Arun Misra is set to become the Group CEO of Vedanta Ltd, transitioning from his role as the CEO of Hindustan Zinc on 15 June and that Prakash is the frontrunner to take over.
During the quarter, the company also appointed Amit Gupta as the Chief Financial Officer of Hindustan Zinc Limited with effect from 1 June. Both Prakash and Gupta attended the company’s quarterly conference interaction with analysts.
The company produced its highest-ever first-quarter mined metal output of 268,000 tonnes, marking the fifth consecutive year of record June-quarter production. Refined metal production rose 4% year-on-year to 260,000 tonnes, supported by better ore grades, debottlenecking initiatives and the commissioning of an additional roaster.
On costs, Misra said the company achieved "the lowest quarterly zinc cost of production excluding royalty since underground transition at $851 per tonne," aided by higher grades, increased renewable energy use and better by-product realization.
Key earnings driver
Silver remained a key earnings driver, contributing about 46% of overall profitability. During the quarter, Hindustan Zinc also monetized 10,000 tonnes of old lead concentrate inventory, generating about ₹315 crore in revenue and realizing the equivalent of about nine tonnes of silver.
Explaining the one-time sale, Misra said the company had disposed of lower-grade concentrate stock accumulated during the stabilization of its new mill that was unusable in their smelters "We took the opportunity of high LME prices... creating value for all of us," he said, adding that the company continues to follow its policy of not routinely selling concentrate.
Misra retained its full-year mined metal production guidance of 1.1 million tonnes, expressing confidence after a strong first quarter.
"We won't have any further shutdowns, and we will deliver on our commitment of 1.1 million tonnes," Misra said, noting that production typically improves in the second half of the year.
The company also reaffirmed its long-term expansion plans. Construction is progressing on a 250,000-tonne integrated zinc smelter, while the phosphoric acid plant is expected to be commissioned in the second quarter. A proposed large zinc and lead smelter project is expected to receive board approval later this fiscal year, with construction likely to take about 36 months, said Misra, adding that currently it is at the conceptualizing stage, therefore, they are unable to give a capex outlook.
Hindustan Zinc ended the quarter with a net cash position of ₹5,572 crore after generating free cash flow of ₹5,253 crore despite ongoing capital expenditure. During the quarter, it also paid an interim dividend of ₹11 per share.
Hindustan Zinc closed 0.16% higher on Friday, while the benchmark index Sensex closed 0.43% lower.
About the Author
Dipali Banka
Dipali Banka is a Mumbai-based journalist who treats corporate reporting less like a beat and more like a puzzle to be solved. This invariably means she has to read through annual reports and speak with leaders and analysts. She tracks policies, deals, and the pulse of industries spanning metals, mining, paints, and cement, alongside aviation. She started out as an intern at The Statesman and then completed her postgraduate diploma in journalism from Asian College of Journalism, Chennai, in 2025. Relentlessly curious at heart, Dipali is driven by the simple urge to understand how things work and who they impact. Armed with an enduring fascination for steel and aeroplanes, she moves through the churn of daily news with focus, turning complexity into clarity without losing the story. She is particularly committed to shaping numbers into objective narratives, having little appetite for vagueness that gets in her way.
Outside the newsroom, Dipali is an unapologetically loud presence who values long conversations and longer walks to unwind. She devours books of all kinds and can often be found indulging in the lyrical sway of contemporary ghazals. She ardently believes that her relationship with her bylines is more sacred than it would ever be with anyone across the human race.
Source: Livemint — Companies
