Hindustan Zinc has unveiled its strategic approach to risk management and sustainability, outlining comprehensive hedging positions and ambitious renewable energy targets that could significantly impact its operational costs and environmental footprint.

Strategic Hedging Framework

The company maintains a disciplined hedging strategy that covers 10% to 20% of its yearly production volume, providing protection against commodity price volatility. For FY2027, Hindustan Zinc has already secured substantial forward positions across its key products.

This hedging approach demonstrates the company's proactive risk management, ensuring price certainty for a significant portion of its production while maintaining exposure to potential upside in commodity markets.

Renewable Energy Transition Roadmap

Hindustan Zinc has charted an aggressive renewable energy expansion plan that will transform its energy profile over the coming years. The company's renewable energy mix is set to increase substantially from its current trajectory.

Cost Savings and Financial Impact

The renewable energy initiative is expected to deliver significant economic benefits beyond environmental advantages. The company projects cost savings of $20.00-$25.00 per tonne of production, which translates to substantial annual savings.

These savings will contribute directly to improved operational efficiency and enhanced profitability while supporting the company's sustainability objectives. The dual strategy of strategic hedging and renewable energy adoption positions Hindustan Zinc to manage both market risks and operational costs effectively while advancing its environmental commitments.

Hindustan Zinc Ltd delivered its strongest quarterly performance on record, posting a net profit of ₹3,916 crore for the three months ended December 31, 2024. The Vedanta Group subsidiary's profit surge of 46% year-on-year was primarily driven by rallying silver prices and improved operational efficiency across its mining operations.

Financial Performance Highlights

The company's financial metrics demonstrated robust growth across key parameters during Q3 FY26:

*Calculated based on reported growth percentages

Silver emerged as the primary profit driver, contributing approximately 44% of the company's total profit during the quarter. The precious metal's average price reached $54.73 per troy ounce, representing a substantial 74% increase compared to the same period last year.

Operational Excellence and Cost Management

Hindustan Zinc achieved significant operational improvements that enhanced profitability beyond favorable commodity pricing. The company recorded its lowest zinc production cost in five years at $940.00 per tonne, down sharply from $1,041.00 per tonne in the corresponding quarter of the previous year.

The company noted that every $25.00 per tonne movement in production costs results in a ₹210-230 crore impact on consolidated EBITDA, highlighting the significance of these cost improvements.

Strong Balance Sheet Recovery

The exceptional quarterly performance enabled Hindustan Zinc to return to a net-cash position after recent quarters of net-debt following significant dividend payouts. The company's financial position improved dramatically:

Management Commentary and Outlook

Arun Misra, Chief Executive Officer, emphasized the quarter's record-breaking nature, stating that the results reflected "operational excellence and strong fundamentals with the company achieving its highest-ever third quarter metal production and five-year lowest quarterly zinc cost of production."

The company maintained its guidance of 680 tonnes of silver production for FY26, despite producing 451 tonnes during the first nine months ending December 31, 2024. This translates to an average of 150 tonnes per quarter, requiring 229 tonnes of silver production in the final quarter to meet annual targets.

Market Performance Drivers

Silver prices reached exceptional levels during the quarter, with December recording an average price of $64.34 per ounce. While silver prices surged, zinc and lead maintained their elevated price levels, providing stable revenue streams from the company's diversified metal portfolio. The combination of favorable pricing and operational efficiency improvements created significant operating leverage, resulting in EBITDA exceeding ₹6,000 crore and surpassing market expectations.