Hindustan Zinc Q4 Profit Jumps 67% on Silver Surge and Weak Rupee

Hindustan Zinc Posts Record Profit as Silver Prices Rally and Rupee Weaken

Mumbai: Hindustan Zinc Ltd reported a 67.6% year-on-year jump in its consolidated net profit for the January-March quarter (Q4FY26), driven by a rally in silver prices, a weaker rupee, and higher volumes. The company's metal division contributed about 45% of its earnings.

The company's consolidated net profit stood at ₹5,033 crore, while revenue rose 49% to ₹13,544 crore on higher metal prices and improved realizations. Hindustan Zinc's chief executive, Arun Mishra, attributed the performance to the combination of the company's lowest cost of production, strong output, and commodity tailwinds.

The company's chief financial officer, Sandeep Modi, attributed the performance to higher production, strong by-product realizations, and better mine grades. He added that while commodity markets remain sensitive in the near term, underlying fundamentals are turning constructive. Modi noted that zinc demand remains stable, supported by galvanization, while lead demand is steady on batteries, and silver demand is driven by structural factors, including strong demand from solar and electronics.

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Hindustan Zinc's zinc production for Q4FY26 stood at 227,000 tonnes, up 5% year-on-year, while silver production remained largely flat at around 176 tonnes. Lead output declined 2% year-on-year to 55,000 tonnes. For the full year, silver production came in at about 627 tonnes, below the revised guidance of 680 tonnes.

However, analysts at Philip Capital, led by metals and mining analyst Suman Kumar, noted that earnings should not be viewed negatively simply because silver production missed guidance. Kumar added that the company prioritizes zinc production and optimizes its output mix based on what delivers the best economic returns.

The company also benefited from lower input expenses, particularly softer domestic coal prices, which helped keep overall costs under control. Addressing production strategy, Mishra noted that the company's ore is predominantly zinc-rich, making it more value-accretive to maximize zinc output at current prices of $3,100-$3,400 per tonne.

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For the full year, mined metal production stood at 1.11 million tonnes and refined metal output at 1.05 million tonnes. For FY27, the company has guided for mined metal production of 1.15 million tonnes, refined metal output of 1.10 million tonnes, and saleable silver production of around 680 tonnes.

The company will pay brand and strategic fees of about ₹1,300 crore to parent Vedanta Ltd, broadly in line with last year, under an agreement valid through 2030. Looking ahead to FY27, the outlook remains positive despite near-term volatility in silver prices. While a decline in silver prices could have some impact, the broader metal cycle remains fundamentally strong, and the company retains a structural cost advantage.

The company's plan to commission a 510,000-tonnes-a-year fertilizer plant at Chanderiya has been delayed by 12-18 months and is now expected to be operational by the first quarter of FY27. The plant will use sulphuric acid generated as a by-product, helping improve margins.

Shares of Hindustan Zinc closed 0.46% lower on Friday on the National Stock Exchange, compared to a 1.14% decline in the benchmark Nifty 50.