Hindustan Zinc — Q2 FY26 earnings call

Call held 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

  • 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

Key financials

3 periods

Headline

  • Revenue
    ₹8,549 Cr
    QoQ +10%
  • EBITDA
    ₹4,467 Cr
    QoQ +16%
  • EBITDA Margin
    52%
  • PAT
    ₹2,649 Cr
    QoQ +19%
  • Refined Metal Production
    246 KT
  • Silver Production
    144 tons
  • Zinc COP (ex-royalty)
    994 $/ton
    YoY -7%
  • RE Power Share
    19%

H1

  • EBITDA
    ₹8,328 Cr
    YoY +3%
  • PAT
    ₹4,883 Cr
    YoY +5%

TTM

  • ROCE
    65%

What they filed

Q1 FY27: revenue up 77.2%, net profit up 146.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue8,242 8,556 9,041 7,723 8,525 +3%10,922 +28%13,488 +49%13,687 +77%
EBITDA4,104 4,458 4,783 3,816 4,426 +8%6,005 +35%7,666 +60%7,994 +109%
Net profit2,298 2,647 2,976 2,204 2,632 +15%3,879 +47%4,997 +68%5,425 +146%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

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

Guidance & targets

Production

  • FY26 Refined Metal Production · FY26 · High confidence 1,075 +/-10 KT
    we have revised our FY 2026 refined metal guidance to 1,075 plus/minus 10 thousand tons per annum

    — Arun Misra

  • FY26 Silver Production · FY26 · High confidence 680 +/-10 tons
    silver guidance to 680 tons plus/minus 10 tons per annum

    — Arun Misra

  • FY27 Silver Target Production · FY27 · Medium confidence 700-750 tons

    From 680 tons FY26 today

    it may not be 800 ton, but surely from 700 ton on an average to 750 ton looks possible

    — Arun Misra

Cost

  • FY26 Zinc COP (ex-royalty) Cost · FY26 · High confidence ~$1,000/ton

    Previously Higher than $1,000 → ~$1,000/ton

    we are revising our full year cost guidance down to around $1,000 per ton, well ahead of our earlier FY27 target

    — Sandeep Modi

  • Q4 Exit COP Cost · Q4 FY26 · High confidence $950-975/ton
    we should be expecting COP around $950 to $975 in the Q4 exit

    — Sandeep Modi

Growth

  • FY26 Growth CAPEX Growth · FY26 · High confidence $350-400 million
    our growth capex guidance for the year would be in the range of $350 million to $400 million

    — Sandeep Modi

Risks & concerns

  • Roaster 6 commissioning delay impacted H1 refined metal production

    medium

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

    Management acknowledged

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

    medium

    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

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

    low

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

    Analyst acknowledged

Areas of evasion (1)

  • FY27 production guidance deferred to business plan

Q&A highlights

3 direct
Silver Production Strategy and FY27 Outlook Direct
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

Hedging Position and Strategy Direct
zinc hedged at 87 KT at $2,872/ton and silver 131 tons at $37/oz... it gives the balancing of the margin on the hedge position, which is 10% to 20%

Silver hedged at $37 vs spot $50+; only 10-20% hedged leaving 80%+ exposure to upside; strategic hedging when prices exceed business plan

Asked by Sumangal Nevatia

Demerger and Zinc International Acquisition Direct
acquisition of Zinc International is really out of the question... on the demerger, we still believe that's the right process... with such rising silver prices, net valuation would have been far better

Zinc International acquisition off the table as both growing to 2 MT separately; demerger into zinc/lead/silver still seen as value-unlocking but timing unclear

Asked by Sumangal Nevatia

1 min read 4 chapters

Detailed narrative

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.

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.

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.

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.

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