Earnings Outlook
Lower volumes, weak base metal prices to hit Hind Zinc PAT
This story was originally published at 19:47 IST on 17 July 2025
Register to read our real-time news.Informist, Thursday, Jul. 17, 2025
By Ashutosh Pati
MUMBAI – Hindustan Zinc Ltd. is expected to have had a challenging June quarter, with both the bottom line and top line expected to decline due to lower sales volumes and a correction in the prices of base metals, according to analysts.
The company, one of the largest producers of zinc and silver globally, is expected to post a net profit of INR 20.96 billion in the quarter ended June, down over 11% on year and nearly 30% sequentially, according to the average of estimates from seven brokerage firms. Estimates for the company's net profit range from INR 20.42 billion by JM Financial Institutional Securities Pvt. Ltd. to INR 21.53 billion by Motilal Oswal Financial Services Ltd.
The Vedanta group company is likely to have earned revenue of INR 77.13 billion in the June quarter, according to the average of estimates. The company's revenue is seen falling more than 2% on year and nearly 15% on quarter. Motilal Oswal has the lowest estimate for the company's revenue at INR 75.65 billion, while Kotak Institutional Equities has the highest estimate of INR 78.55 billion.
The average prices of zinc in the quarter ended June fell around 7% on year and sequentially, while prices of lead fell 11% on year and around 2% on quarter. The average price of silver in the June quarter rose nearly 16% on year and around 4% from the March quarter.
Earlier this month, Hindustan Zinc said its mined metal production in the June quarter rose 1% on year to 265,000 tonnes, its highest ever for the first quarter of a financial year. However, the production was down 15% sequentially due to mine preparation activities that are carried out every year in these three months. Saleable metal production fell 5% on year and 7% sequentially to 250,000 tonnes. Of this, refined zinc output fell 4% on year to 202,000 tonnes, and refined lead production declined 6% to 48,000 tonnes.
Hindustan Zinc's earnings before interest, tax, depreciation, and amortisation are seen falling nearly 5% on year to INR 37.65 billion, according to the average of estimates. Sequentially, the base metal producer's operating profit is expected to fall around 22%. Estimates for the company's EBITDA range from INR 36.49 billion by Dolat Capital Market Pvt. Ltd. to INR 38.53 billion by Motilal Oswal. All brokerages expect the company's EBITDA to decline due to lower prices for zinc and lead. Kotak said better silver prices will partially offset the fall.
Meanwhile, the company's cost of production for zinc, excluding royalty, for the June quarter is expected to rise 3% sequentially to $1,020 per tonne, according to Nuvama Wealth Management Ltd.
During an investor call in June, the company's management said that its board approved a 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 expansion is expected to reduce zinc production costs to $1,000 per tonne.
The company will detail its June quarter earnings Friday. Investors and analysts will track the company's guidance on volumes, realisations, cost of production, and future dividend payout, according to Motilal Oswal. "We await further insights on any additional updates related to changes in the corporate structure, if any," the brokerage said.
Thursday, shares of Hindustan Zinc closed 0.4% higher at INR 437.10 on the National Stock Exchange. Since reporting its March quarter earnings on Apr. 25, shares of the company have fallen nearly 2%.
Of the seven brokerage reports on the company available with Informist, four have a 'buy' or equivalent rating on the stock, two have a 'hold' and equivalent rating, and Nuvama has a ‘reduce' rating. Among these brokerages, the highest target price for the ‘buy' rating is by Dolat Capital at INR 564.
Following are the Apr-Jun earnings estimates for Hindustan Zinc based on reports compiled by Informist from seven brokerages in descending order by the estimate of net profit:
Brokerage firm | Net sales | Net profit | EBITDA |
-------(In INR million)------ | |||
Motilal Oswal Financial Services Ltd | 75,648.00 | 21,531.00 | 38,528.00 |
Nuvama Wealth Management Ltd | 76,921.00 | 21,269.00 | 37,875.00 |
Dolat Capital Market Pvt Ltd | 78,159.00 | 21,014.00 | 36,489.00 |
Systematix Shares and Stocks (India) Ltd | 76,800.00 | 21,000.00 | 38,000.00 |
Kotak Institutional Equities | 78,546.00 | 20,887.00 | 38,304.00 |
YES Securities (India) Ltd | 76,756.00 | 20,615.00 | 36,817.00 |
JM Financial Institutional Securities Pvt Ltd | 77,051.00 | 20,418.00 | 37,567.00 |
Average | 77,125.86 | 20,962.00 | 37,654.29 |
End
US$1 = INR 86.07
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Saji George Titus
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