Summary
Hindustan Zinc Limited - Q3 FY 2026 Earnings Call Summary Monday, January 19, 2026, 4:00 PM IST
Event Participants
Executives 3 Arun Misra (CEO), Raksha Jain (Director IR), Sandeep Modi (CFO)
Analysts 6 Anirudh Nagpal, Ashish Kejriwal, Manav Gogia, Pallav Agarwal, Pinakin, Sumangal Nevatia
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹10,980 crores | +27% YoY, +28% QoQ; driven by record output, buoyant commodity prices, and byproduct realizations. |
| EBITDA | ₹6,087 crores | +34% YoY, +36% QoQ; highest ever quarterly performance with 55% industry-leading margins. |
| Profit After Tax | ₹3,916 crores | +46% YoY, +48% QoQ; record profit supported by structural cost leadership and volume growth. |
| Zinc Cost of Production (COP) | $940 per ton | -10% YoY, -5% QoQ; lowest in 5 years due to higher domestic coal usage (58%) and operational discipline. |
| Mined Metal Production | 276,000 tons | +YoY; highest ever third quarter since the underground transition. |
| Refined Metal Production | 270,000 tons | +YoY; record Q3 performance following debottlenecking at Chanderiya and Dariba smelters. |
| Saleable Silver Production | 158 tons | +10% QoQ; precious metals now contribute 44% of total profits. |
| Net Cash Position | ₹329 crores | Improved from net debt of ₹2,547 crores in Q2 FY26; driven by strong free cash flow generation. |
| Free Cash Flow | ₹3,413 crores | Represents cash flow before growth capex and RE investments for the quarter. |
Geographic & Segment Commentary
- Mining Operations: Achieved record 9-month mined metal production of 799,000 tons. Focus remains on deep-mining development, with mine development increasing to 15 kilometers this year from 14 kilometers YoY to support future volumes.
- Smelting & Refining: Completed debottlenecking at Chanderiya and Dariba, adding 21,000 tons to overall capacity. A new 160,000 TPA roaster at Debari is now operational, improving plant availability and supporting the transition to 1.2 MTPA refined metal capacity.
- Precious Metals (Silver): Strategic focus on maximizing silver recovery through new initiatives like the graphite pre-float process at Rampura Agucha. Management noted the sale of 21 tons of silver equivalent through concentrate sales to capture high market prices.
Company-Specific & Strategic Commentary
- 2x Growth Strategy: Locked in EPC partners for the 250,000 TPA integrated zinc smelter at Debari (completion Q2 FY29) and the tailings reprocessing plant at Rampura Agucha (completion Q4 FY28).
- Renewable Energy (RE) Transition: RE share reached 20% this quarter, with a target of 25% by FY26 exit and 70% by FY28. This transition is expected to save $20-$25 per ton in COP, amounting to ₹250-₹300 crores annually.
- Hedging Strategy: Maintenance of a consistent policy to hedge 10%-20% of volumes. For FY27, the company has already hedged 66 kt of zinc at $3,170/t and 56 tons of silver at $58/oz.
- Sustainability Leadership: Ranked #1 globally in the S&P Global Corporate Sustainability Assessment 2025 for the third consecutive year with a score of 90/100.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Silver Volume | 680 tons (+/- 10 tons) | FY26 target; management remains confident due to traditionally strong Q4 performance and higher recovery. |
| Zinc COP | $950 - $1,000 per ton | Sustainable long-term range; current FY26 performance expected to be well below the guided range. |
| Growth Capex | ~$300 million | Total FY26 spend anticipated as the company accelerates the 2x expansion project. |
| Maintenance Capex | ~$400 million | Full-year FY26 estimate covering routine operational sustainment. |
Risks & Constraints
| Risk | Context |
|---|---|
| Safety & Operational Risk | A fatal incident occurred at Rajpura Dariba mine during the quarter; management is implementing stricter corrective measures to prevent recurrence. |
| Commodity Price Volatility | Silver and Zinc prices are subject to geopolitical tensions and macro sentiment; management uses strategic hedging to mitigate downside on ~20% of volume. |
| Increasing Mine Depth | As mines go deeper, development costs and inflationary pressures on mining rates increase, potentially offsetting some power-related cost savings. |
Q&A Highlights
Silver Production & Sales
- Question: Why was silver production higher and how are premiums trending? (Manav Gogia)
- Answer: Premiums for lead and silver are in line with market benchmarks. The company sold 21 tons of silver equivalent via lead concentrate to capitalize on high prices and inventory tightness (Sandeep Modi).
Hedging Strategy
- Question: What are the current hedge positions for FY26 and FY27? (Manav Gogia)
- Answer: For FY27, 66 kt zinc is hedged at $3,170 and 56 tons silver at $58. For Q4 FY26, 53 kt zinc is hedged at $2,900 and 68 tons silver at $39 (Sandeep Modi).
Cost Sustainability
- Question: Is the $940 COP sustainable given the byproduct credits? (Pinakin)
- Answer: Excluding byproducts, COP would be $60-$70 higher. However, $950-$1,000 remains the sustainable range even as mines go deeper, supported by RE power and coal mix (Sandeep Modi).
Operational Mode
- Question: Why not switch to a lead-heavy mode given high silver prices? (Vikas Singh)
- Answer: High zinc prices (~$3,300) justify a “zinc plus lead” mode. Switching exclusively to lead would cause zinc concentrate to pile up; current prices favor producing both (Arun Misra).
Key Takeaway
Hindustan Zinc delivered a landmark third quarter, achieving record revenue of ₹10,980 crores and its best-ever PAT of ₹3,916 crores. Operational excellence was evidenced by a 5-year low zinc COP of $940/t, driven by a 58% domestic coal mix and rising byproduct realizations from silver, which now accounts for 44% of profits. The company successfully transitioned back to a net cash position of ₹329 crores while progressing on its 2x growth strategy, with EPC contracts now secured for major smelter and tailings projects. Management remains focused on a structural shift toward 70% renewable energy by FY28 to maintain cost leadership. Despite global macro uncertainty and a fatal safety incident under investigation, the company is positioned to meet its FY26 volume guidance, supported by debottlenecked capacities and a bullish outlook on critical minerals.
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