Hindustan Zinc — Q4 FY26 earnings call

Call held 24 Apr 2026

Management summary

Hindustan Zinc reported a stellar Q4 and full year FY26, achieving record revenue, EBITDA, and net profit, driven by strong production volumes and cost efficiencies. The company transitioned to a net cash position and provided robust guidance for FY27 production and capex, while maintaining its dividend policy. Strategic investments in expansion projects and critical mineral blocks are underway, though geopolitical uncertainties are factored into future cost guidance.

Highlights

  • Achieved record-breaking Q4 FY26 performance with Revenue of ₹13,544 crores (+49.0% YoY, +23.0% QoQ), EBITDA of ₹7,747 crores (+61.0% YoY, +27.0% QoQ), and Net Profit of ₹5,033 crores (+68.0% YoY, +29.0% QoQ).

  • Full Year FY26 saw record Revenue of ₹40,844 crores, EBITDA of ₹22,162 crores, and Net Profit of ₹13,832 crores.

  • Zinc Cost of Production (excl. royalty) for FY26 was $959/ton, a five-year low and below the $1,000/ton guidance, driven by lower power costs, improved by-product realization, and operating leverage.

  • Transitioned to a net cash position of ₹5,594 crores as of March 31, 2026, from a net debt position of ₹1,169 crores last year, with gross cash at ~₹14,000 crores.

  • Secured three critical mineral blocks (potash, tungsten, rare earths) and made steady progress on growth projects including a 250,000 tpa integrated zinc smelter at Debari and a tailings reprocessing plant at Rampura Agucha.

Concerns

  • An unfortunate employee fatality occurred at Zawar mines on January 25, 2026, due to a man-machine interaction.

  • FY27 Zinc CoP guidance of $975-$1,000/ton reflects prevailing global uncertainties and potential input cost increases, higher than Q4 FY26's $903/ton.

  • Silver production guidance for FY27 (680 tons) appears conservative compared to the Q4 FY26 run rate of 176 tons, with management indicating flexibility to prioritize zinc production based on LME prices.

Key financials

3 periods

Headline

  • Net Cash (Mar '26)
    ₹5,594 Cr

Q4 FY26

  • Revenue
    ₹13,544 Cr
    YoY +49% QoQ +23%
  • EBITDA
    ₹7,747 Cr
    YoY +61% QoQ +27%
  • Net Profit
    ₹5,033 Cr
    YoY +68% QoQ +29%
  • Zinc CoP (excl. royalty)
    903 $/ton
    YoY -9% QoQ -4%
  • Mined Metal Production
    315 KT
  • Refined Metal Production
    282 KT
  • Silver Production
    176 tons
    QoQ +11%
  • EBITDA Margin
    57%

FY26

  • Revenue
    ₹40,844 Cr
  • EBITDA
    ₹22,162 Cr
  • Net Profit
    ₹13,832 Cr
  • Zinc CoP (excl. royalty)
    959 $/ton

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.

Capital allocation

high confidence
  • Capex $500 Mn
    • Growth projects $500 Mn
    Planned capital expenditure for FY27 is in the range of $500 million to $600 million towards announced growth projects.
  • Debt Net cash ₹5,594 Cr
    Our strong cash generation enabled us to close the year with a net cash position of INR5,594 crores as of March '26, compared to a net debt position of INR1,169 crores at the close of the last year. Our gross cash position is around INR14,000 crores as at March '26.
  • Dividend ₹11/share (interim)
    And out of that, Board has approved the first interim dividend of INR11, which is around INR4,300 crores. I think that should be the case.
  • Liquidity Cash ₹14,000 Cr
    Our gross cash position is around INR14,000 crores as at March '26.

Guidance & targets

Volume

  • Mined metal production Volume · FY27 · High confidence 1,150 KTPA (+/- 10 KT)
    Looking into the year ahead, with a well-structured capex roadmap in place, we are confident in sustaining this strong performance in the year ahead with an expected mined metal production of 1,150 KTPA, plus or minus 10 KT

    — Arun Misra

  • Refined metal production Volume · FY27 · High confidence 1,100 KTPA (+/- 10 KT)
    and a refined metal production of 1,100 KTPA, plus or minus 10 KT

    — Arun Misra

  • Refined silver production Volume · FY27 · High confidence 680 tons (+/- 10 tons)
    with an expected refined silver production of 680 tons, plus or minus 10 tons.

    — Arun Misra

Cost

  • Zinc CoP (excl. royalty) Cost · FY27 · High confidence $975 to $1,000/ton
    For FY27, we have guided zinc cost of production excluding royalty at $975 to $1,000 per ton, reflecting prevailing global uncertainties.

    — Sandeep Modi

  • Cost reduction from RE increase Cost · Long-term · High confidence $1/ton for every 2% RE increase
    So we earlier said that every 2% renewable energy increase will have a $1 cost reduction. We still stand by it given the long-term coal prices. So if we move from 20% to 70%, we can see the further potential of $25 per ton cost reduction.

    — Sandeep Modi

Capex

  • Capital expenditure Capex · FY27 · High confidence $500 million to $600 million
    Planned capital expenditure for FY27 is in the range of $500 million to $600 million towards announced growth projects.

    — Sandeep Modi

Sustainability

  • Renewable energy consumption Sustainability · FY27 · High confidence 30% to 35%

    Previously 18% → 30% to 35%

    So FY26 we closed for the full year around 18% renewable energy and for the full year in FY'27, we should be between 30% to 35%.

    — Sandeep Modi

  • Renewable energy consumption Sustainability · FY28 · High confidence 70%
    70% is by FY28 as we committed earlier as well as part of our sustainability goals. By FY28 we'll be 70% round the clock.

    — Sandeep Modi

Capacity

  • Integrated Smelter Capacity Capacity · Long-term · Medium confidence 1,000,000 ton
    We plan to do that where we are putting the 250 KTPA smelter. That means in one location 1,000,000 ton smelter will come up.

    — Arun Misra

Shareholder Returns

  • Dividend Payout Policy Shareholder Returns · Ongoing · High confidence Minimum 30% of PAT
    So and minimum 30% is the policy that that stays as of now regardless of capex?

    — Sandeep Modi

What to watch in Q1 FY27

Phosphoric Acid Plant Commissioning

within 3 months
Current Not operational yet
Target Commercial operations

Why it matters

This is the first phase of the fertilizer project, a key growth initiative, and its commissioning will indicate progress on diversification.

No, we have not started operations at all and another 3 months down the line we should be able to start our phosphoric acid plant, which is the first part.

Risks & concerns

  • Employee Fatality

    high

    An employee lost life at Zawar mines on January 25, 2026, due to a man-machine interaction, prompting enhanced safety protocols.

    Management acknowledged

  • Geopolitical Uncertainties and Input Costs

    medium

    Global macro environment marked by uneven growth and geopolitical volatility, potentially impacting input costs (diesel, propane gas, chemicals, explosives) and reflected in higher FY27 CoP guidance.

    Management acknowledged

Q&A highlights

8 direct
Silver Production Strategy vs. Zinc Prices Direct
If the zinc prices fall to say $2,800 to $3,000 per ton. If the zinc prices fall, then and silver remains at say $60 at troy ounce, it will make much sense to produce more lead and silver than production of zinc. And when we do that, then we'll surely see the numbers going up to 700 tons plus.

Clarifies the company's flexible production strategy to optimize profitability based on relative zinc and silver prices, explaining why silver production might not always be maximized.

Asked by Pinakin

Nature of 'Other Expenses' and 'Other Operating Income' Direct
HZL has... entered into the various agreements with... third party where we provide them smelters residue which they convert from waste to wealth... So as per this arrangement, HZL sells the smelter residue... which is like the PF cake... and then after that it is also purchase back the finished goods or the WIP... So that's why as per the accounting, the transaction is accounted when the sale happens as other operating income and when the purchase happens, it is the part of the other expenditure. And the amount is around INR600 crores both sides.

Explains the significant sequential jump in other expenses and other operating income as a result of new ancillary business agreements for processing smelter residue, clarifying its accounting treatment and future growth potential.

Asked by Manav Gogia

Timeline and Scope of 1 Million Ton Smelter Expansion Direct
Earlier we were thinking we will make two or three different smelters in different locations. Then we had an idea instead of doing that, why not bring everything together in one place? Then we reworked the whole plan and now the designers have confirmed that in one location about a 600, 700 KTPA smelter can be put... That means in one location 1,000,000 ton smelter will come up. So that design has been finalized. Now the commercial process is going on. I see that another one month's time we should be able to place the order.

Provides crucial updates on the strategic shift for the smelter expansion, consolidating multiple smaller units into a single 1 million ton facility, with a clear timeline for order placement.

Asked by Ashish Kejriwal

Mine Lease Renewals and First Right of Refusal Direct
No, we are comfortable because we have the first right of refusal. So in any case we it's only a matter of how much premium we are ready to pay, but just by bidding people cannot take it away.

Addresses concerns about mine lease expirations, confirming the company's strong position due to its first right of refusal, which de-risks future raw material supply.

Asked by Ashish Kejriwal

Silver Hedging Strategy and Horizon Direct
I think as we said in the earlier calls also, we will be our philosophy and policy has been to hedge between 10% to 20%. And at this point of time, we are comfortable with the 10%. We'll see if the prices spike, which we believe is not a sustainable kind of thing because of the war situation, then we can look at, but if you see in the last quarter we have not hedged anything. We'll continue to be comfortable at 10%... We will not be going beyond 12 months. That is very sure.

Clarifies the company's consistent hedging policy of 10-20% of annual volume, emphasizing a short-term horizon (not beyond 12 months) and a preference for maintaining an open position for better earnings.

Asked by Vikas Singh

Fertilizer Plant Commissioning Timeline Direct
No, we have not started operations at all and another 3 months down the line we should be able to start our phosphoric acid plant, which is the first part. Then maybe 2026 end or '27 early, which is January, we will be able to start our DAP manufacturing plant.

Provides a clear, phased timeline for the commissioning of the fertilizer project, starting with the phosphoric acid plant, which is a key growth initiative.

Asked by Sumangal Nevatia

Impact of Mining Grade on Cost of Production Direct
So see the cost of Q4 has been a significant benefit coming on account of the mining grade. So we had a mining grade of 7.9% in the Q4 and compared to the full year average of around 7.5%. And as I explained, 10 bps of the mining grade impacts the $7.

Highlights the direct correlation between mining grade and cost of production, explaining the low Q4 CoP and providing context for future CoP fluctuations.

Asked by Pallav Agarwal

Dividend Payout Policy and Balancing Growth Direct
So we will continue to I think the Board will continue to balance between paying dividend and investing for the expansion. So that balance will continue and I don't think it is one or the other, both will continue.

Reassures investors that the company will continue to balance shareholder returns with funding growth initiatives, indicating a sustainable capital allocation strategy.

Asked by Sumangal Nevatia

3 min read 7 chapters

Detailed narrative

Record Financial Performance in Q4 and Full Year FY26

Hindustan Zinc delivered an all-time high financial performance in Q4 FY26, with Revenue reaching ₹13,544 crores (up 49.0% YoY and 23.0% QoQ), EBITDA at ₹7,747 crores (up 61.0% YoY and 27.0% QoQ) with a 57.0% margin, and Net Profit of ₹5,033 crores (up 68.0% YoY and 29.0% QoQ). For the full year FY26, the company achieved record Revenue of ₹40,844 crores, EBITDA of ₹22,162 crores, and Net Profit of ₹13,832 crores, marking significant milestones.

Cost Leadership and Operational Efficiency

The Zinc Cost of Production (excl. royalty) for Q4 FY26 was $903/ton, representing a 9.0% YoY and 4.0% QoQ decline, making it the lowest since the underground transition. This was attributed to higher domestic coal usage (64.0%), softened imported coal prices, increased production volumes, strong by-product realization, and better mine grades. The full year FY26 CoP stood at $959/ton, a five-year low and below the guidance of $1,000/ton, underscoring the structural strength of the cost base.

Production Milestones and Volume Growth

The company achieved a new milestone in FY26 by crossing 1.1 million tons of mined metal production and sustained over 1 million tons of refined metal production for the fourth consecutive year. Q4 FY26 saw record-breaking mined metal production of 315 KT and refined metal production of 282 KT. For FY27, Hindustan Zinc has guided for mined metal production of 1,150 KTPA (+/- 10 KT) and refined metal production of 1,100 KTPA (+/- 10 KT).

Smelter Expansion and Capacity Growth

Hindustan Zinc is progressing with its 250,000 tpa integrated zinc smelter at Debari, with site mobilization complete and detailed engineering finalized. The company has revised its long-term smelter expansion strategy, opting to consolidate multiple planned smelters into a single 1 million ton facility at one location, where the 250 KTPA smelter is being built. The design for this 1 million ton smelter is finalized, with order placement expected within approximately one month and mill portion orders by June.

Growth Projects and Diversification

Beyond smelter expansion, the company is accelerating exploration for its 2x growth plans with partners at Zawar and Rajpura Dariba. Technology-led initiatives include the Hot Acid Leaching process, expected to commission in 2Q FY27, and a fertilizer project on track for commissioning in early 2Q FY27. The company has also secured three critical mineral blocks for potash, tungsten, and rare earths, supporting its journey to become a multi-metal enterprise.

Strong Cash Position and Capital Allocation

As of March 31, 2026, Hindustan Zinc moved to a net cash position of ₹5,594 crores, a significant improvement from a net debt of ₹1,169 crores in the previous year, with gross cash at approximately ₹14,000 crores. The company declared an interim dividend of ₹11 per share for FY27, maintaining its policy of a minimum 30% PAT payout. Planned capital expenditure for FY27 is set at $500 million to $600 million for announced growth projects, with management committed to balancing dividend payouts and investment for expansion.

Sustainability and ESG Leadership

Hindustan Zinc was featured in the top 1% of the S&P Global Sustainability Yearbook for the ninth consecutive year. Progress towards 2030 goals includes 18.0% renewable energy consumption in FY26, with a target to increase this to 30-35% in FY27 and 70% by FY28. The Chanderiya Lead Zinc Smelter became India's first site to receive Zinc Mark and Copper Mark certification, reflecting strong environmental commitment.

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