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    Hindustan Zinc

    HINDZINCGood
    Metals & Mining·17 Oct 2025
    Management Summary

    Hindustan Zinc delivered record Q2 and H1 performance driven by favorable commodity prices, 5-year lowest COP, and highest-ever mined metal production. Silver at 40% of profits with prices crossing $50/oz creates significant upside optionality. The company revised COP guidance down to ~$1,000/ton, well ahead of earlier FY27 targets. Growth projects are on track with EPC partners finalized for the transformative 2x expansion. Included in Nifty 100 effective September 30, 2025.

    Highlights

    8

    • Highest-ever Q2 revenue of Rs. 8,549 crores (+10% QoQ) and highest-ever Q2 EBITDA of Rs. 4,467 crores (+16% QoQ) at 52% margin

    • PAT of Rs. 2,649 crores (+19% QoQ); H1 PAT Rs. 4,883 crores (+5% YoY)

    • Highest-ever H1 mined metal production; refined metal 246 KT; silver 144 tons in Q2

    • 5-year lowest Q2 and H1 zinc COP: $994/ton Q2 (-7% YoY), $1,002/ton H1 (-8% YoY)

    • Revised FY26 guidance: refined metal 1,075 +/-10 KT, silver 680 +/-10 tons; COP revised down to ~$1,000/ton

    • Commissioned 160 KT roaster at Debari; debottlenecked Dariba cell house (+25 KT zinc capacity)

    • Hedging: zinc 87 KT at $2,872/ton, silver 131 tons at $37/oz for H2 FY26

    • Growth capex guidance $350-400M; EPC partners finalized for 250 KT smelter and 10 MT tailings plant

    What Changed2

    vs Q3 FY26

    Tone shiftHighly confident — record results across all metrics with structural cost advantages and favorable commodity tailwinds → GoodRisks discussed4 → 3 (-1)
    Key financials

    Metrics

    11

    Periods

    2

    Headline

    10
    • Revenue
      ₹8,549 Cr
      QoQ+10%
    • EBITDA
      ₹4,467 Cr
      QoQ+16%
    • EBITDA Margin
      52%
    • PAT
      ₹2,649 Cr
      QoQ+19%
    • H1 EBITDA
      ₹8,328 Cr
      YoY+3%

    TTM

    1
    • ROCE
      65%

    Segment breakdown

    Production
    246 KT Refined Metal (Q2)144 tons Silver (Q2)7.4% Ore Grade90 ppm Silver Grade
    Cost
    994 $/ton Zinc COP ex-royalty (Q2)1,002 $/ton H1 COP58% Domestic Coal Share
    List

    Guidance & targets

    6
    CategoryTargetPriority
    Production
    FY26 Refined Metal
    1,075 +/-10 KT
    		High
    Production
    FY26 Silver
    680 +/-10 tons
    		High
    Production
    FY27 Silver Target
    700-750 tons
    		Medium
    Cost
    FY26 Zinc COP (ex-royalty)
    ~$1,000/ton
    		High
    Cost
    Q4 Exit COP
    $950-975/ton
    		High
    Growth
    FY26 Growth CAPEX
    $350-400 million
    		High

    Risks & concerns

    4
    RiskSeverity

    Roaster 6 commissioning delay impacted H1 refined metal production

    Delay in R6 roaster commissioning impacted calcine availability in H1; now commissioned and resolved for H2 — Management acknowledged

    medium

    Silver hedging at $37/oz vs spot $50+ creates opportunity cost

    131 tons of silver hedged at $37/oz for H2; however only represents 10-20% of total volume — Analyst acknowledged

    low

    Growth CAPEX ramp-up ($16,000 crores over 3 years)

    Rs. 12,000 crores for 250 KT smelter+mine+concentrator and Rs. 3,800 crores for tailings; 20% FY26, 50% FY27, 30% FY28; funded from strong cash flows — Management downplayed

    medium

    Areas of Evasion(1)

    • FY27 production guidance deferred to business plan

    Q&A highlights

    3

    “we are running on zinc plus lead mode, but consuming most of the concentrate from SK Mine, which is rich in silver... from 700 ton on an average to 750 ton looks possible in FY27”

    Silver grade at only 90 ppm limits lead-mode benefit; management redirecting mining resources to high-silver SK Mine stopes; FY27 target 700-750 tons with fumer and hot acid leaching additions

    asked by Amit Lahoti

    1 min read4 chapters

    Detailed Narrative

    01

    Record H1 Performance with Silver at 40% of Profits

    HZL delivered highest-ever Q2 and H1 financial performance with EBITDA of Rs. 4,467 crores (+16% QoQ) and Rs. 8,328 crores (+3% YoY) respectively. PAT was Rs. 2,649 crores in Q2 and Rs. 4,883 crores in H1. Silver, now at ~40% of profits with prices crossing $50/oz all-time high, makes HZL uniquely positioned as India's only integrated silver producer. Record ROCE of 65% on trailing 12-month basis.

    02

    Cost Leadership: 5-Year Lows with RE Scaling

    Zinc COP excluding royalty hit 5-year lows at $994/ton in Q2 and $1,002/ton in H1. Full-year guidance revised down to ~$1,000/ton from earlier targets, with Q4 exit expected at $950-975/ton. Key drivers: 58% domestic coal usage, softened imported coal prices, 19% RE power share. Every 2% RE increase saves $1.5/ton. RE roadmap: 25% exit FY26, 35-40% FY27, 70% FY28.

    03

    Growth Projects: 2x Expansion Underway

    EPC partners finalized for both transformative projects: 250 KT integrated zinc smelter at Debari (Rs. 12,000 crores, Q2 FY29) and 10 MT tailings reprocessing plant at Rampura Agucha (Rs. 3,800 crores, Q4 FY28). Tailings will produce ~100 KT zinc and 25 tons silver. New 240 kiloamp cell houses (vs 200 kA current) with inherent debottlenecking ability. CAPEX phasing📎: 20% FY26, 50% FY27, 30% FY28.

    04

    Operational Milestones and Capacity Additions

    Commissioned 160 KT roaster at Debari improving plant availability. Debottlenecked Dariba cell house from 200 to 210 kiloamps; Chanderiya debottlenecking by Q3 FY26. Together adding 25 KT annual zinc capacity. Lead-silver recovery plant with hot acid leaching technology by Q4 FY26. FY27 silver target 700-750 tons with fumer stabilization and acid leaching additions. Zinc International acquisition ruled out; demerger still considered value-accretive.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.