Hindustan Zinc's Q1 consolidated net profit drops 4.7% to ₹2,234 crore

Hindustan Zinc reports a 4.7% YoY decline in net profit to Rs 2,234 crore for Q1FY26, impacted by lower production and falling zinc and lead prices, partly offset by higher silver prices.

Vedanta’s subsidiary Hindustan Zinc reported a 4.7 per cent drop in its consolidated net profit to Rs 2,234 crore for the first quarter ending on June 30 (Q1) of FY26, compared with the year-ago quarter, due to lower revenue from operations. Total revenue from operations of the zinc and silver producer was down by 4.4 per cent to Rs 7,771 crore in Q1FY26 on a year-on-year (YoY) basis.

 

Arun Misra, chief executive officer (CEO) of Hindustan Zinc, told Business Standard in an exclusive interaction that the revenue was impacted by lower production volume (down by 5 per cent on a YoY basis in the April-June quarter), lower zinc and lead prices, which was partly offset by higher silver prices and better by-product realisation.

 

 

“Our production volume was lower because primarily we had to make certain shutdowns (of furnaces or smelter operations) ahead of schedule, and that has impacted the operations. Otherwise, going forward, the shutdowns are over,” Misra said.

 

Zinc prices were down by 7 per cent, while lead prices were down by 10 per cent, as per the London Metal Exchange (LME) in Q1FY26 on a YoY basis. In contrast, silver prices maintained an upward trend with a 17 per cent YoY increase in Q1. Sequentially, as well, Hindustan Zinc’s net profit and revenue decreased by 25.6 per cent and 14.5 per cent, respectively. Meanwhile, the company’s other income rose by 4.1 per cent YoY to Rs 279 crore in Q1FY26. 

 

“Despite commodity headwinds and a weaker dollar, our focus on sustainable and efficient production enabled us to deliver a consistent EBITDA margin of around 50 per cent,” said Sandeep Modi, chief financial officer of Hindustan Zinc, in the earnings call. “Amidst continued global uncertainties, our healthy balance sheet, structurally leaner cost base, and robust growth project pipeline position us well to deliver sustainable long-term value.”

 

The company’s profit before interest, depreciation, and tax (PBIDT) dropped by 1.8 per cent YoY to Rs 4,138 crore in Q1.

 

In terms of mined metal production, the company recorded its highest-ever first-quarter production of 265,000 tonnes, up by 1 per cent in Q1 compared with the same quarter last year. However, its refined metal production was down to 250,000 tonnes, in line with plant availability and due to maintenance activities, according to its investor presentation. Silver, on the other hand, remains a key contributor to the company's profitability, accounting for approximately 41 per cent.

 

“We have prioritised the use of silver-bearing concentrate in quarter one itself, and we will continue to do so. I am very certain that we will have better silver numbers in the remaining part of the year,” Misra added.

 

Additionally, Hindustan Zinc is committed to meeting India's rising zinc demand and may announce additional projects over the course of the year. The zinc and silver producer has also secured letters of intent (LOI) for all three new critical mineral blocks: potash in Rajasthan with a 1,841-hectare block size, rare earth elements in Uttar Pradesh with a 201-hectare block size, and tungsten in Andhra Pradesh with a 308-hectare block size.