Vedanta-owned Hindustan Zinc, amongst the largest zinc and silver producers globally, saw a 21 per cent YoY decline in profit-after-tax to ₹2,038 crore for the quarter ending March 31, 2024. Standalone profit-after-tax in the year-ago-period was ₹2,589 crore.

The hit came on account of a slowdown in zinc prices, and supply outstripping growth in demand. On a sequential basis, profits remained flat.

Sales declined 11 per cent YoY to ₹7,550 crore for the quarter under review. Sales in the year-ago-period were at ₹7,310 crore. Sales declined across categories such as zinc and lead, down 17 per cent and 8 per cent YoY, respectively. Silver sales, however, were up 12 per cent YoY.

Net profit declined 26 per cent to ₹7,787 crore in FY24. Net profit in FY23 was ₹10,520 crore. Sales also declined 22 per cent YoY to ₹13,681 crore; whereas it stood at Rs 17,596 crore in FY23. On an annual basis, zinc sales declined by 25 per cent.

According to the company statement, mined metal production for the full year was 1,079 kt, up 2 per cent YoY, on account of improved mined metal grades. Refined metal production for the full year was 1,033 kt, marginally up YoY. Zinc production was down on a YoY basis.

“Revenue from operations for the full year (was) down ....on account of lower zinc prices and volumes, and strategic hedging impact in the base period, partly offset by better silver and lead volumes and prices, and favourable exchange rates,” the company said in its statement.

According to Sandeep Modi, CFO, Hindustan Zinc, despite plunging metal prices, the company sustained a steady margin of 47 per cent and recorded a fifth consecutive quarter of cost reduction. “Maximisation of silver production leveraging the prices, and power plant modifications leading to lowering of power costs, were some steps.”

FY25 outlook

Hindustan Zinc projected FY25 mined metal production between 1,100-1,125 kt and refined metal production in the range of 1,075-1,100 kt.

In FY25, saleable silver production is projected to be between 750-775 MT.

The cost of production of zinc in FY25 is expected between $1,050-1,100 per MT. Project capex for the year is expected to be in the range of US$270-325 million.