Hindustan Zinc says to announce next phase of capex plans in 30-45 days
This story was originally published at 19:02 IST on 17 June 2025
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--Hind Zinc: Large capex plans spread across FY27-FY30
--Hind Zinc: To announce next phase of expansion plans in 30-45 days
--Hind Zinc: Capacity expansion to help cut cost of zinc production
--Hind Zinc: See zinc production cost falling to $1,000/tn vs $1,050/tn
--Hind Zinc: Hope to generate INR 500 bln-INR 550 bln cash flow over 5 yrs
--Hind Zinc: May raise debt if necessary to fund capex
--Hind Zinc: Plan to fund most of future capex via internal accruals
--CONTEXT: Comments by Hindustan Zinc mgmt in an analyst call
By Narayana Krishna and Sunil Raghu
HYDERABAD/AHMEDABAD - Hindustan Zinc Ltd., which seeks to double its capacity over the next five years, will announce the next phase of its capital expenditure programme within 30–45 days, the company's management said during an investor call on Tuesday. The Vedanta Group-controlled company's board on Tuesday approved an INR 120 billion capex plan to set up a 250,000 tonne per annum integrated zinc smelter along with associated infrastructure.
Hindustan Zinc aims to scale up its total zinc production capacity to 2 million tonnes in the next five years, up from the current 1.13 million tonnes. The company estimates a total capital expenditure of around INR 400 billion-INR 500 billion for its expansion programme, which includes increasing silver and lead production capacities.
The INR 120 billion announcement marks the first phase of the broader capex plan. The management indicated that the second phase — covering the balance of the 2 million tonne capacity target — could be announced within the next 30 to 45 days.
Of the INR 120 billion approved on Tuesday, the company expects to spend INR 30–INR 35 billion in 2025-26 (Apr–Mar), INR 50 billion in FY27, and the remainder in FY28, according to management.
Hindustan Zinc intends to fund most of the capex through internal accruals, as it expects to generate INR 500 billion–INR 550 billion in free cash flows over the five-year period. However, the company remains open to raising debt if required. A large portion of the planned expenditure will be spread across FY28 to FY30, the management noted.
The expansion is expected to reduce zinc production costs to $1,000 per tonne, down from the current $1,050 per tonne. The company also expects stronger cash flows following the completion of the first phase, which will further support funding for subsequent capex needs.
Once the first phase is complete, Hindustan Zinc expects its revenue to touch INR 400 billion–INR 420 billion, while earnings before interest, tax, depreciation and amortisation are projected to reach INR 210 billion–INR 220 billion. For FY25, the company posted a net profit of INR 102.8 billion, up nearly 32% from INR 77.9 billion a year earlier. Revenue rose over 17% to INR 339.7 billion.
On Tuesday, shares of Hindustan Zinc closed 5.2% lower at INR 486.35 on the National Stock Exchange. End
US$1 = INR 86.24
Edited by Deepshikha Bhardwaj
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