Hindustan Zinc April-June Profit Drops On Year, Misses Five-Quarter Streak

Hindustan Zinc Ltd.'s net profit for the June quarter fell 6.5% on year to ₹22.04 billion, dragged by lower volumes and weak zinc and lead prices. This marks the first profit decline in five quarters, though it was above Street expectations of ₹20.96 billion.

Revenue from operations dipped 5% on year to ₹77.23 billion, slightly higher than the ₹77.12 billion estimated by analysts. On a sequential basis, net profit slid 26% while revenue was down 14.6%.

The Vedanta Group company posted EBITDA of ₹38.60 billion, down 2% on year but higher than the expected ₹37.65 billion. EBITDA margin improved to 50% from 49% a year ago, helped by higher silver prices, a stronger dollar, and lower production costs.

Finance costs eased 6.6% on year to ₹2.39 billion. Zinc production cost dropped 9% to $1,010 per tonne—its lowest for the June quarter since Hindustan Zinc's shift to underground mining. The company attributed the fall to better metal grades, more use of domestic coal and renewable energy, and lower input costs.

Revenue from zinc, lead, and other metals fell to ₹61.16 billion from ₹64.21 billion a year ago, while the silver segment remained flat at ₹14.27 billion. The company expects zinc and lead prices to remain steady despite a possible surplus.

Mined metal output hit a record 265,000 tonnes in the quarter, up 1% on year. CEO Arun Misra said the performance shows the company’s focus on efficiency and cost control.

Total expenditure fell 4.2% on year to ₹50.57 billion. Mining royalty dropped 6% to ₹9.09 billion. Power and fuel expenses were down nearly 5% to ₹6.31 billion. Tax outgo slipped nearly 4% to ₹7.44 billion.

Debt-to-equity rose to 1.2 times from 0.84 times a year ago. As of June 30, cash and investments stood at ₹93.40 billion, while borrowings totalled ₹135.24 billion. The company declared an interim dividend of ₹10 per share.

Hindustan Zinc is progressing on multiple expansion projects. It plans to commission a 160,000 tonne-per-annum roaster at Debari and finish debottlenecking at its Dariba and Chanderiya smelters in Rajasthan by the September quarter.

It also aims to start a 510,000 tonne-per-annum fertiliser plant at Chanderiya by next June and a hot acid leaching plant for silver and lead recovery at Dariba by the end of this fiscal.

In June, the board cleared a ₹120.00 billion investment for a 250,000 tonne-per-annum integrated metal expansion with matching mine and mill capacity, as the company eyes doubling growth by 2030 in line with global zinc demand.