 "Hindustan Zinc")
Integrated zinc, lead, and silver producer, Hindustan Zinc (HZL), on Friday reported a 19.4 per cent year-on-year (Y-o-Y) increase in net profit in the April to June quarter (Q1 FY25) on the back of cost reduction and elevated metal and silver prices.
Net profit in Q1 FY25 was at Rs 2,345 crore compared to Rs 1,964 crore in the year-ago period.
Commenting on the performance, Arun Misra, chief executive officer, said that there was a 7 per cent cost reduction during the quarter compared to the same period last year, which aided profitability.
Net sales on a consolidated basis stood at Rs 7,893 crore in Q1 FY25, up 11 per cent Y-o-Y.
Sequentially, net sales were higher by 8.3 per cent and net profit 15.1 per cent.
The company also clocked in the highest-ever first-quarter mined and refined metal production. Mined metal production for the quarter was 263,000 tonnes, up 2 per cent Y-o-Y. Refined metal production at 262,000 tonnes was up 1 per cent Y-o-Y. Saleable silver production for the quarter was 167 tonnes, down 7 per cent Y-o-Y.
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With a strong demand outlook, HZL has expansion plans in its sight. The company is looking to increase its mining and smelting capacity from 1.2 million tonnes (mt) to 2 mt.
Sandeep Modi, chief financial officer, said this was currently at a conceptualisation stage.
“We have appointed reputed European and Australian mining consultants. They are preparing reports on how we can increase capacity from 1.2 mt to 2 mt. Once they submit the report, we will go to the board and get approval for the capex.”
Modi added that the company generates Rs 9,000 crore to 10,000 crore of cash every year. “So, I don’t think for any capex we have to go to the market,” he said. According to ballpark estimates, the investment in the project could be Rs 24,000 crore.
The company estimates that if India achieves a 300 mt steel capacity, then the zinc requirement would be about 3 mt.
HZL has about 75 per cent of the domestic market in zinc. Misra pointed out that the demand in India was very stable. The government spend on infrastructure, the growing automobile sector, and expanding middle class segment were among the contributing factors. “These are all reflective of good demand for zinc in India.”
However, Misra said that the expectation was demand in China would grow further and the economy in Europe would turn around faster. “That has not happened,” he said, adding that it was dampening the spirit and reflecting on the global price of zinc.
However, Misra expects that with the US elections round the corner, Q4 will be much better.
 "Hindustan Zinc")
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 "Arun Misra")
