MUMBAI: A rally in silver prices, a weaker rupee and higher volumes drove a 67.6% year-on-year jump in Hindustan Zinc Ltd’s profit for the January-March quarter (Q4FY26), with the metal contributing about 45% of earnings.
The company reported a consolidated net profit of ₹5,033 crore, while revenue rose 49% to ₹13,544 crore on higher metal prices and improved realizations.
The “combination of lowest cost of production, strong output, and commodity tailwinds translated into all time high financial performance both the quarter and full year,” said Arun Mishra, chief executive, Hindustan Zinc, in a post-earnings call.
Chief financial officer Sandeep Modi attributed the performance to higher production, strong by-product realizations, and better mine grades. He added that while commodity markets remain sensitive in the near term, underlying fundamentals are turning constructive.
“Zinc demand remains stable, supported by galvanization; lead demand is steady on batteries; and silver stands out structurally, with strong demand from solar and electronics driving a sustained deficit,” Modi said.
Zinc production for Q4FY26 stood at 227,000 tonnes, up 5% year-on-year, while silver production remained largely flat at around 176 tonnes. Lead output declined 2% year-on-year to 55,000 tonnes.
For the full year, silver production came in at about 627 tonnes, below the revised guidance of 680 tonnes, which was cut earlier from 700-710 tonnes in the second quarter of FY26. As the company prioritizes zinc production, silver and lead output fell.
“Earnings should not be viewed negatively simply because silver production missed guidance. As management explained, this is largely an outcome of economic trade-offs within the business. Zinc prices were strong, in the $3,200–3,400 range, the company optimises its output mix based on what delivers the best economic returns. So production decisions are driven by profitability rather than volume targets,” said Suman Kumar, metals and mining analyst at brokerage firm Philip Capital.
“On costs, the company benefited from lower input expenses, particularly softer domestic coal prices, which helped keep overall costs under control,” said Kumar.
Addressing production strategy, Mishra said the company’s ore is predominantly zinc-rich, making it more value-accretive to maximize zinc output at current prices of $3,100–$3,400 per tonne. However, if zinc prices soften to $2,800–$3,000 per tonne while silver remains strong at around $60 per ounce, the company could shift towards lead and silver, potentially lifting silver output beyond 700 tonnes.
For the full year, mined metal production stood at 1.11 million tonnes and refined metal output at 1.05 million tonnes. For FY27, the company has guided for mined metal production of 1.15 million tonnes, refined metal output of 1.10 million tonnes, and saleable silver production of around 680 tonnes.
For FY27, the company will pay brand and strategic fees of about ₹1,300 crore to parent Vedanta Ltd, broadly in line with last year, under an agreement valid through 2030.
Looking ahead to FY27, the outlook remains positive despite near-term volatility in silver prices. While a decline in silver prices could have some impact, the broader metal cycle remains fundamentally strong, and the company retains a structural cost advantage, Philip Capital analyst Kumar said.
“Key factors to watch will be the performance of the fertilizer plant, trends in silver prices, and input cost pressures, especially as imported raw materials have become more expensive due to geopolitical disruptions,” he said.
The company's plan to commission a 510,000-tonnes-a-year fertilizer plant at Chanderiya has been delayed by 12-18 months and is now expected to be operational by the first quarter of FY27. The plant will use sulphuric acid generated as a by-product, helping improve margins.
Shares of Hindustan Zinc closed 0.46% lower on Friday on the National Stock Exchange, compared to a 1.14% decline in the benchmark Nifty 50.
