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Informist, Friday, Apr. 24, 2026

 

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--Hind Zinc: Medium term outlook for silver demand remains firm 
--CONTEXT: Hind Zinc management's comments in post-earnings analyst concall 
--Hind Zinc: Hedged 25 tonnes of silver till June qtr at avg price of $57/oz 
--Hind Zinc: Hedged 59 tonnes of silver for FY27 at avg price of $60/oz 
--Hind Zinc: Hedged 20,000 tonnes of zinc for June qtr, 71,000 tn for FY27 
--Hind Zinc: Natural gas shortage led to marginal cost increase of $11/tn Q4 
--Hind Zinc: To place order for 600,000-700,000 tn per annum smelter in 1 mo 
--Hind Zinc: No impact of West Asia war right now on co's operations 

 

By Ashutosh Pati and Suryash Kumar

 

MUMBAI – Hindustan Zinc Ltd. is planning a capacity expansion of nearly one million tonnes per annum in Rajasthan, with work on 250,000 tonnes per annum underway and an order for 600,000-700,000 tonnes per annum to be placed in a month, the management told analysts Friday in a post-earnings conference call.

 

"...earlier we were thinking we will make two or three different smelters in different locations," a top Hindustan Zinc official said. "Then we had an idea. Instead of doing that, why not bring everything together in one place?" So the company reworked the plan and its designers confirmed that capacity of up to 700,000 tonnes per annum could be added on to the expansion of 250,000 tonnes per annum. "So, that design has been finalised," the official said. "Now the commercial process is going on. I see that another month's time we should be able to place the order."

 

The site mobilisation for the 250,000 tonnes per annum integrated refined zinc capacity expansion has been completed and detailed engineering and mining partner deployment are underway, with completion expected by the September quarter of the financial year 2028-29 (Apr-Mar), the company said.

 

Amid high volatility in prices of silver, Hindustan Zinc has hedged 25 tonnes of silver for the June quarter at an average price of $57 per ounce and 59 tonnes for FY27 at an average price of $60 per ounce. The company has also hedged 20,000 tonnes of zinc for the June quarter at an average price of $3,100 per tonne and 71,000 tonnes for FY27 at an average price of $3,225 per tonne.

 

The company's policy has been to hedge around 10-20% of its output and it is currently "comfortable" hedging only 10%, especially for silver. "...we believe that... silver being a byproduct, it's not worthwhile to experiment and do the hedging beyond 10%", the management said.

 

During the March quarter, the price of zinc averaged $3,241 per tonne and the price of lead averaged $1,931 per tonne, reflecting tight market conditions and steady demand from infrastructure, galvanisation, and battery segments, the management said. Silver continues to "stand out", maintaining strong momentum on robust industrial demand, particularly from the solar and electronics sectors, along with continued investor interest. "While prices have normalised from peak levels, the medium-term outlook remains constructive, driven by structural demand from energy transition and limited supply growth," the company management said.

 

Asked when the company's silver production could rise sharply, the management said it can happen when zinc prices fall to around $2,800-$3,000 per tonne and silver prices remain around $60 per ounce. In such a scenario, the company can produce more than 700 tonnes of silver per annum. The company has pegged its saleable silver output for FY27 at around 680 tonnes, similar to FY26. The ore that the company mines is rich in zinc. If zinc prices rise, Hindustan Zinc will produce more of the base metal as "it is better than producing 30 tonnes additional silver". As one official explained, "If I put 30,000 tonnes of additional zinc (on the market), it brings me more money."

 

Hindustan Zinc's 510,000 tonnes-per-annum fertiliser plant is expected to be completed by the September quarter. Since the company has not started operations here, there is no impact as yet of the military conflict in West Asia between the US and Iran. "...another three months down the line, we should be able to start our phosphoric acid plant, which is the first part," the management said.

 

In the March quarter, the company incurred marginally higher input cost of around $11 per tonne due to the shortage of natural gas, but there has been no impact on production.

 

Hindustan Zinc reported a net profit of INR 49.97 billion for the March quarter, up around 68% on year and nearly 29% from the trailing quarter. Its revenue from operations rose over 49% on year and nearly 24% on quarter to INR 134.88 billion. The company reported its March quarter earnings during market hours. The stock closed 0.6% lower at INR 588.50 on the National Stock Exchange.  End

 

US$1 = INR 94.24

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Rajeev Pai

 

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