Earnings Review
Hindustan Zinc Oct-Dec PAT up 30%, beats Street view
This story was originally published at 16:20 IST on 28 January 2025
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--Hind Zinc Oct-Dec net profit INR 26.47 bln
--Analysts saw Hind Zinc Oct-Dec net profit INR 24.83 bln
--Hind Zinc Oct-Dec net profit INR 26.47 bln vs INR 20.38 bln year ago
--Hind Zinc Oct-Dec revenue INR 82.57 bln vs INR 70.67 bln year ago
--Hind Zinc Apr-Dec net profit INR 73.03 bln vs INR 57.45 bln year ago
--Hind Zinc Apr-Dec revenue INR 241.44 bln vs INR 207.98 bln year ago
--Hind Zinc Oct-Dec debt-to-equity ratio 1.18 vs 0.77 year ago
--Hind Zinc Oct-Dec operating margin 42% vs 36% year ago
--Hind Zinc Oct-Dec consol silver sales INR 14.7 bln vs INR 14.1 bln yr ago
--Hind Zinc Oct-Dec consol zinc sales INR 68.32 bln vs INR 56.33 bln yr ago
--Hind Zinc: Oct-Dec zinc pre-royalty output cost $1,041/tn, down 5% on yr
--Hind Zinc sees global zinc market continuing in deficit in 2025
--Hind Zinc sees continuing deficit in silver supply in 2025, 2026
--Hind Zinc Apr-Dec pre-capex free cash flow generation INR 96.64 bln
By Sunil Raghu
AHMEDABAD – Hindustan Zinc Ltd. recorded a 29.9% on-year rise in net profit for the quarter ended December at INR 26.47 billion due to higher silver, lead and zinc volumes and prices. In a filing with stock exchanges, the company said the net profit was the best in nine quarters, even as its earnings before interest, tax, depreciation and amortisation was a historic best at INR 86.14 billion in Oct-Dec.
The Vedanta group firm's net revenue jumped 16.8% on year to INR 82.57 billion during Oct-Dec. While the net profit beat analysts' average estimate of INR 24.83 billion, the company's revenue was lower than the Street's view of INR 84.74 billion.
The company's other operating income for the December quarter rose 23.1% on year to INR 3 billion.
For Apr-Dec, the company's net profit was INR 73.03 billion on revenue of INR 241.44 billion. Hindustan Zinc's net profit for Apr-Dec 2023-24 was INR 57.45 billion on revenue of INR 207.98 billion.
The company recorded higher consolidated zinc sales of INR 68.32 billion in Oct-Dec, compared to INR 56.33 billion a year ago. Similarly, consolidated silver sales during Oct-Dec were t INR 14.65 billion, up from INR 14.1 billion a year ago. The company's operating margin for Oct-Dec stood at 42%, compared to 36% a year ago.
"Hindustan Zinc achieved its highest-ever third-quarter EBITDA and a nine-quarter best net profit. During this period, the company also recorded its lowest cost of production in last 15 quarters at $1,041 per tonne," Chief Financial Officer Sandeep Modi said in the company's statement accompanying the Oct-Dec earnings filing with stock exchanges.
However, the company's overall production fell during the quarter, something it expects to continue in 2025. In an update earlier this month, the company said mined metal production volume in the December quarter fell 2% on year to 265,000 tonnes. However, the company's mined metal production rose 3% sequentially due to higher mined metal grades and increased production at the Agucha and Zawar mines in Rajasthan. In the nine months till December, the company saw mined metal production of 784,000 tonnes.
Production of saleable metal, which includes refined zinc and lead, was flat at 259,000 tonnes. The company produced 204,000 tonnes of refined zinc and 55,000 tonnes of refined lead during the quarter. Refined metal production was down 1% sequentially due to a planned maintenance shutdown in the December quarter.
Production of silver declined to 160,000 tonnes during the December quarter, down 18% over the same period a year ago, the company had earlier said. Sequentially, the company's output of silver fell 13%. The company expects continuing deficit in silver supply in 2025 and 2026.
The company's total expenditure rose 7.1% on year to INR 52.86 billion in the December quarter, led by an increase in mining royalty and finance costs. Mining royalty increased 15.9% on year to INR 10.36 billion in Oct-Dec, even as finance costs were up 17.3% on year at INR 2.85 billion for the same period.
Other expenses rose 9.6% on year to INR 22.18 billion. The company's employee benefits expenses inched up 22.8% to INR 2.42 billion. Its tax expense for the quarter was INR 8.4 billion, up 31.9% from INR 6.4 billion in the year-ago period.
Hindustan Zinc said that as on Dec. 31, it had gross investments and cash, and cash equivalents of INR 81.53 billion, invested in debt instruments. The total outstanding borrowings as of Dec. 31 stood at INR 122.7 billion and the net debt was INR 41.17 billion, compared to INR 57.21 billion on Sept. 30. The company's Oct-Dec debt-to-equity ratio stood at 1.18, compared to 0.77 a year ago. The pre-capital expenditure free cash flow generation for Apr-Dec was at INR 96.64 billion.
On Tuesday, shares of Hindustan Zinc closed 3.9% lower at INR 433.20 per share on the National Stock Exchange. End
Edited by Avishek Dutta
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