Hindustan Zinc Q4FY24 results: Net profit dips 21% to Rs 2,038 crore

On HZL's earlier proposed move to demerge its businesses into separate entities, the company's management said hinges on the government deciding to go ahead with its offer for sale

Zinc and lead producer Hindustan Zinc (HZL) on Friday reported a 21 per cent decline in its profit after tax (PAT) for the March 2024 quarter (Q4FY24). Lower zinc prices, as traded on the London Metal Exchange (LME), impacted profits for the firm.

For the quarter under review, HZL reported a PAT of Rs 2,038 crore, down from Rs 2,583 crore reported a year ago. Net sales was down 12 per cent to    Rs 7,285 crore from the corresponding period in the last financial year.

Sequentially, the firm’s PAT growth was flat at 0.5 per cent and net sales was up 3 per cent.

On HZL’s earlier proposal to demerge its businesses into separate entities, the company’s management said the plan hinges on the government’s decision to go ahead with its offer for sale (OFS) in the ongoing quarter.

 “Cost curtailment has helped arrest the dip in profits, as LME has been significantly impacted,” said Arun Misra, chief executive officer (CEO), in a call with Business Standard. Zinc’s cost of production in FY24 was at its lowest in the last three years at $1,117 per tonne, the company said. In September, the company’s board authorised a committee of directors to evaluate and recommend options and alternatives for separate legal entities to undertake the zinc and lead, silver, and recycling business of the company. Executives expected the move to help the government ease in with its earlier considered divestment. 

On Friday, Misra said: “We are hopeful the government will go ahead with the proposed OFS in the current quarter.” When asked what happens to the proposed demerger in the absence of the OFS, he said, “It will be a missed opportunity as metal prices currently present a golden opportunity.”

In FY25, the company plans to spend $270-325 million as capital expenditure, which company executives said, may be part funded through debt to take advantage of suitable finance costs.

HZL also expects both mined metal and refined metal production in FY25 to be higher than FY24, given the ramp-up of all major projects commissioned in the last year and better capacity utilisation.