HINDZINC - Hindustan Zinc

📊 NSE: HINDZINC 🏢 Mining / Minerals / Metals 📅 Last Updated: 12/14/2025 7:45

💰 Financial Performance

Revenue Growth by Segment

Total revenue for Q2 FY26 was INR 8,549 Cr, representing a 4% YoY growth and a 10% QoQ increase. H1 FY26 revenue stood at INR 16,320 Cr, which was almost flat YoY. Segment-specific percentage splits were not disclosed, though the company is a dominant player in the domestic zinc and lead markets.

Geographic Revenue Split

Not specifically disclosed in percentage terms, but the company maintains a dominant position in the domestic Indian market with access to the bulk of lead-zinc deposits in Rajasthan through long-term government agreements.

Profitability Margins

Profit After Tax (PAT) for Q2 FY26 was INR 2,649 Cr, up 14% YoY and 19% QoQ. H1 FY26 PAT was INR 4,883 Cr, up 5% YoY. The PAT margin for Q2 FY26 is approximately 31%.

EBITDA Margin

EBITDA margin for Q2 FY26 was 52%, an improvement of approximately 180 bps YoY and 260 bps QoQ. H1 FY26 EBITDA margin was approximately 51%, up 150 bps YoY. EBITDA for Q2 FY26 reached INR 4,467 Cr, up 7% YoY and 16% QoQ.

Capital Expenditure

The company has planned a total capex of INR 16,000 Cr over the next 3 to 4 years. For FY26, growth capex guidance was revised from USD 350 million to USD 400 million (approx. INR 3,300 Cr). The spending schedule is 20% in the current year, 50% in the next year, and the remainder in FY28.

Credit Rating & Borrowing

CRISIL AAA/Stable rating. Total debt stood at INR 14,012 Cr as of June 30, 2025, compared to INR 11,220 Cr as of March 31, 2025. Net leverage (net debt to EBITDA) remains very low at 0.1 times.

⚙️ Operational Drivers

Raw Materials

Zinc ore and coal are the primary raw materials. Coal costs have softened, and the company is increasing renewable energy consumption to lower power and fuel costs, which are significant components of the cost of production.

Import Sources

Primary ore deposits are sourced from Rajasthan, India. Coal is sourced domestically, with improvements noted in domestic coal consumption efficiency.

Key Suppliers

Vedanta Resources Ltd (ultimate parent) and the Government of India (mining rights and minority shareholder).

Capacity Expansion

Current capacity is approximately 1.123 MTPA (based on FY25 production of 1,052 KT). The company is targeting a stabilized production of 250 KTPA per quarter and is commissioning a new roaster and debottlenecking projects to reach a capacity of 1.128 MTPA.

Raw Material Costs

Zinc Cost of Production (COP) excluding royalty was USD 994 per ton in Q2 FY26, the lowest in 5 years. H1 FY26 COP was USD 1,002 per ton. Costs were reduced by higher by-product realization and softened input commodity prices.

Manufacturing Efficiency

Record ROCE of approximately 65% for the trailing 12 months. Q1 FY26 production was 250 KT, slightly lower than the previous year (262 KT) due to scheduled shutdowns for debottlenecking.

Logistics & Distribution

Not disclosed as a specific percentage of revenue.

📈 Strategic Growth

Expected Growth Rate

Not disclosed

Growth Strategy

Growth will be driven by expanding the critical mineral portfolio (Potash, Tungsten, REEs), debottlenecking existing assets to reach 1.128 MTPA, and investing INR 16,000 Cr in capex. The company also aims to become net cash positive by the end of FY26.

Products & Services

Zinc, Lead, Silver, and upcoming critical minerals including Potash, Tungsten, and Rare Earth Elements (REEs).

Brand Portfolio

Hindustan Zinc (HINDZINC).

New Products/Services

Expansion into Potash, Tungsten, and REEs. Expected revenue contribution percentages for these new segments are not yet disclosed.

Market Expansion

Focus on strengthening its position as a future-ready sustainability-driven global leader and inclusion in major indices like Nifty 100 and Nifty Next 50.

Market Share & Ranking

World's largest integrated zinc producer; Top 5 in Nifty Metal Index.

Strategic Alliances

The company is a subsidiary of Vedanta Limited and maintains long-term agreements with the Government of India for mining deposits.

🌍 External Factors

Industry Trends

Zinc is expected to remain in a resilient trading band; lead demand is underpinned by batteries; silver is expected to sustain gains. The industry is shifting toward sustainable mining and critical minerals for the energy transition.

Competitive Landscape

Dominant domestic player with high entry barriers due to mining rights and integrated smelting capacity.

Competitive Moat

Durable competitive advantage through low-cost production (USD 994/ton), integrated operations, and a long mine life of over 25 years with 453.2 MT of reserves and resources.

Macro Economic Sensitivity

Highly sensitive to global zinc and silver prices and domestic infrastructure spending (GDP growth) which drives steel demand.

Consumer Behavior

Increasing demand for silver in industrial and investment sectors and zinc in infrastructure-led galvanization.

Geopolitical Risks

Tepid global growth environment and trade barriers could impact export-driven scale, though integrated operations provide a cost buffer.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by long-term mining agreements with the Government of India and environmental pollution norms for smelting and mining.

Environmental Compliance

Commitment to Sustainability Goals 2030, including GHG emissions reduction and water stewardship. ESG compliance is a key monitorable for credit ratings.

Taxation Policy Impact

Not disclosed in percentage terms for the future, but historical dividend payouts are large to support parent debt.

Legal Contingencies

Not disclosed in terms of specific pending court case values.

⚠️ Risk Analysis

Key Uncertainties

Potential for high dividend outflows to support the debt of the ultimate parent (Vedanta Resources Ltd), which could impact liquidity if operating cash flows weaken.

Geographic Concentration Risk

100% of mining operations are concentrated in Rajasthan, India.

Third Party Dependencies

High dependency on the Government of India for the renewal and maintenance of mining leases.

Technology Obsolescence Risk

The company is mitigating technology risks by transitioning to 240 kiloamps cell houses and leveraging technology for risk mitigation in underground mining.