Hindustan Zinc, a Vedanta Group company, has announced a robust financial performance for the second quarter of fiscal year 2024-25 (Q2 FY25), reporting a significant 35% increase in net profit. The company’s net profit for the quarter reached ₹2,327 crore, up from ₹1,729 crore in the corresponding period last year, reflecting the company’s strong operational efficiency and market positioning in the metal sector.
The company also posted a notable rise in revenue from operations, which surged by 21% to ₹8,004 crore in Q2 FY25, compared to ₹6,619 crore in Q2 FY24. This growth has been attributed to higher mined metal and refined metal production, along with favorable metal prices during the quarter. As of 2:30 PM on October 18, Hindustan Zinc’s shares on the Bombay Stock Exchange (BSE) were trading 1.35% higher, at ₹515 per share, reflecting positive investor sentiment following the strong quarterly performance.
Investment in Renewable Energy: Hindustan Zinc to Acquire Stake in Serentica
In a significant move towards sustainable energy sourcing, Hindustan Zinc’s board of directors has approved an investment of ₹327 crore to acquire at least a 26% equity stake in Serentica Renewable India Private Limited (SRIPL) or its affiliates. This investment is part of Hindustan Zinc’s strategy to secure renewable power for its operations and reduce its carbon footprint.
As part of the deal, Hindustan Zinc has entered into a Power Delivery Agreement (PDA) with Serentica, under which the company will source 530 megawatts (MW) of renewable power on a Round-The-Clock (RTC) basis through a group captive arrangement. This agreement is set for a long-term duration of 25 years, ensuring stable and sustainable power supply for Hindustan Zinc’s operations. The ₹327 crore equity infusion will secure a minimum of 26% stake in Serentica, further solidifying Hindustan Zinc’s commitment to renewable energy and sustainability.
This investment aligns with Hindustan Zinc’s broader corporate social responsibility (CSR) initiatives and its push towards greener energy solutions. It also highlights the company’s focus on enhancing operational efficiency while minimizing environmental impact. By adopting renewable energy, Hindustan Zinc is not only cutting costs but also setting a benchmark in the industry for sustainable business practices.
Strong Financial Performance: Hindustan Zinc’s Growth in Key Metrics
In Q2 FY25, Hindustan Zinc’s consolidated net profit grew by an impressive 34.58%, reaching ₹2,327 crore, compared to ₹1,729 crore in the same quarter of the previous fiscal year. The company’s revenue from operations surged by 20.9% to ₹8,004 crore, up from ₹6,619 crore a year earlier, underscoring the company’s strong growth trajectory. This rise in revenue can be attributed to higher metal prices, increased production volumes, and cost optimization measures implemented by the company.
The company’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for Q2 FY25 stood at ₹4,123 crore, representing a 31% increase from ₹3,139 crore in the previous year’s corresponding period. The EBITDA margin improved to 50%, up from 46.2% in Q2 FY24, indicating improved operational efficiency and cost control. The increase in EBITDA margin reflects Hindustan Zinc’s ability to manage its costs effectively while benefiting from favorable metal prices, particularly in the zinc and silver markets.
Following the announcement of its strong quarterly results, Hindustan Zinc’s stock witnessed a positive movement. On the National Stock Exchange (NSE), the stock rose by 0.8% to ₹512.55, while on the BSE, it climbed 1% to ₹513.25. The stock has gained 3.2% over the past month, and its year-to-date (YTD) performance shows a significant increase of 60.6%, reflecting strong investor confidence in the company’s growth prospects.
Mined Metal Production and Operational Highlights
Hindustan Zinc also achieved its highest-ever second-quarter mined metal production, recording 256 kilotonnes (KT), a 2% year-on-year (YoY) increase. This growth was primarily driven by higher ore production at the Zawar Mine. However, on a quarter-on-quarter (QoQ) basis, production saw a slight 2% decline due to lower overall mined metal grades during the quarter.
The company’s refined metal production also saw improvements, contributing to the strong revenue and profit growth. Hindustan Zinc has been focusing on increasing its silver production, capitalizing on favorable precious metal prices. The company’s silver production through pyro operations on lead mode witnessed a 10% sequential increase in volumes, further boosting the company’s financial performance.
Commenting on the results, Arun Misra, CEO of Hindustan Zinc, expressed his optimism about the company’s performance. “Hindustan Zinc has sustained its momentum from the previous quarter, achieving historic highs in mined and refined metal production. Leveraging strong precious metal prices, we have focused on maximizing silver production, resulting in a 10% sequential increment in silver volumes,” Misra stated.
Hindustan Zinc, a key player in the global zinc and silver markets, continues to maintain its leadership position. The company is the world’s second-largest producer of integrated zinc and the third-largest silver producer, with a strong presence in both domestic and international markets.
Conclusion
Hindustan Zinc’s strong Q2 FY25 financial performance reflects its ability to navigate market challenges while capitalizing on favorable metal prices and operational efficiencies. The company’s investment in renewable energy and its continued focus on sustainable growth position it well for the future. With increasing metal production, a solid financial base, and strategic investments in renewable power, Hindustan Zinc is well-equipped to maintain its leadership position in the global zinc and silver markets.
As the company moves forward, its focus on sustainability, operational excellence, and shareholder value will likely continue to drive its growth and profitability in the coming quarters. Investors have responded positively to the company’s latest results, and with a strong year-to-date performance, Hindustan Zinc remains a stock to watch in the Indian metal industry.
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