Hindustan Zinc's margins to see support from firm prices, lower costs

Hindustan Zinc (HZ)’s revenue at *8,550 crore was up 4 per cent year-on-year (Yo-Y) and 10 per cent quarter-on-quarter (Q-0-Q) with better commodity prices, offset by lower volumes.

- DEVANGSHU DATTA

The operating profit was in line with consensus at %4,450 crore, up7 per cent Y-0-Y (and 15 percent higher Q-0-Q). The operating profit margin stood at 52 percent in Q2FY26, compared to 497 per cent in QuFY26 and 50 per cent in Q2FY25.

Apart from better prices, HZ lowered cost of production (CoP). Zinc CoP stood at $994 per tonne, which declined 7 per cent Yo-Y and 2 per cent Q-o-Q, due to softened input prices and higher byproduct realisations. The adjusted net profit stood at %2,650 crore, up 14 per cent Yo-Y and 19 percent Q-0-Q.

In HiFY26, HZ’s revenue was flat Yo-Yat%16,300 crore, but both operating and net profit increased 3 per cent Y-0-Y to%8,300 crore and %4,900 crore, respectively. HZ's gross investments, cash and cash equivalents declined 12.7 per cent sequentially to $8,160 crore and total outstanding borrowings declined 21 percent Q-0-Q to%10,700 crore.

The mined metal for Q2FY26 was 258 kilotonnes (kt), up 1 per cent Y-0-Y (down3 percent Q-0-Q). Refined metal production for Q2 stood at 247kt.