Hindustan Zinc , India's largest integrated zinc producer, has reported a strong performance in the first quarter, achieving its highest-ever Q1 mine metal production despite facing headwinds from softened commodity prices.

Record Production and Cost Efficiency

The company delivered a record-breaking mine metal production of 265,000 tons in Q1, marking its highest-ever first-quarter output. Notably, Hindustan Zinc also achieved its lowest quarterly cost of production at $1,010.00 per ton since transitioning to underground mining operations, demonstrating significant operational efficiency.

Financial Performance

Despite the challenging market conditions, Hindustan Zinc reported a revenue of Rs. 7,771.00 crores for the quarter, down 4% year-on-year. The decline was primarily attributed to lower zinc and lead prices, partially offset by higher silver prices. The company's EBITDA stood at Rs. 3,860.00 crores, maintaining a robust margin of 50%. Profit after tax reached Rs. 2,234.00 crores.

Operational Highlights

• Refined metal production was 250,000 tons, impacted by planned maintenance activities.
• Silver production stood at 149 metric tons, contributing significantly to overall profitability.
• The zinc alloy plant achieved a record quarterly production of 5,000 tons.
• Renewable energy usage increased to 19% of total power consumption, up from 13% in the previous year.

Strategic Initiatives and Expansion Plans

Hindustan Zinc's board has approved a 250,000 tons per annum integrated metal capacity expansion with a capital expenditure of Rs. 12,000.00 crores. This expansion is set to increase the company's refined metal capacity to 1.38 million tons per annum and mining capability to 1.5 million tons per annum.

The company has also secured Letters of Intent (LOIs) for three critical mineral blocks:

1. Potash in Rajasthan (1,841 hectare block)
2. Rare Earth Elements in Uttar Pradesh (201 hectare block)
3. Tungsten in Andhra Pradesh (308 hectare block)

These acquisitions align with India's goal of achieving critical mineral security and resource nationalism.

Sustainability and Innovation

Hindustan Zinc continues to make strides in sustainability:

• Achieved 3.32x water positivity
• Launched ambitious "Sustainability Goals 2030"
• Increased domestic coal utilization to 55%

The company is also actively engaging with over 40 technology startups on more than 60 different projects to drive innovation-led transformation across its operations.

Market Outlook and Future Prospects

While global economic uncertainties persist, India remains a bright spot with strong domestic momentum. Hindustan Zinc is well-positioned to meet the rising domestic and global demand for zinc, supported by its expansion plans and strategic focus on portfolio diversification.

As the company progresses with its growth projects, including the commissioning of a new 160,000 tons per annum roaster at Debari, Hindustan Zinc remains confident in achieving its full-year guidance and creating long-term value for all stakeholders.

With its strong operational performance, strategic expansions, and focus on sustainability, Hindustan Zinc is poised for continued growth in the evolving global metals market.

Hindustan Zinc , a leading integrated producer of zinc, lead, and silver, has released its financial results for the first quarter, showcasing a mixed performance with improved profitability margins despite a decline in revenue and net profit.

Financial Highlights

Improved Profitability Amid Challenges

Despite facing a challenging market environment, Hindustan Zinc managed to improve its EBITDA margin to 49.70%, surpassing both year-on-year and estimated figures. This improvement in profitability margin demonstrates the company's ability to maintain operational efficiency and cost management in the face of revenue pressures.

Revenue and Profit Performance

The company reported a decrease in revenue, which stood at ₹7,771.00 crore for the quarter, down 4.40% year-on-year and missing expectations. This decline in revenue might be attributed to various factors such as market dynamics or commodity price fluctuations.

Net profit for the quarter also saw a decline, coming in at ₹2,234.00 crore, down 4.70% compared to the previous year. However, it's worth noting that the profit figure beat market estimates, showcasing the company's resilience in a challenging environment.

Credit Rating Reaffirmation

In a separate development, Hindustan Zinc received a vote of confidence from CRISIL Ratings Limited. As per the company's disclosure to the stock exchanges, CRISIL has reaffirmed Hindustan Zinc's credit ratings, maintaining them at CRISIL AAA/Stable/CRISIL A1+. This reaffirmation comes after CRISIL's independent evaluation, which took into account a recent short-seller report.

The rating agency's decision underscores continued confidence in Hindustan Zinc's overall business stability and healthy financial performance. CRISIL also noted that there has been no adverse reaction from any lender or investor following the short-seller report.

Conclusion

Hindustan Zinc's Q1 results present a picture of resilience in the face of market challenges. While revenue saw a decline and missed expectations, the company managed to beat profit estimates. The improvement in EBITDA margin highlights the company's focus on operational efficiency. The reaffirmation of credit ratings further reinforces the company's strong financial position and market standing.

Investors and stakeholders will likely keep a close eye on how Hindustan Zinc navigates the evolving market conditions in the coming quarters, particularly in light of its ability to maintain profitability margins amidst revenue pressures.