Hindustan Zinc plans ₹5,000 crore capex for FY27 as CEO Arun Misra cites higher LME prices, lower costs, and improved efficiency for a 145% jump in quarterly profit. The company has hedged 38 tonnes of silver at ~$62/oz for Q2.
Alpha Score of 40 reflects weak overall profile with moderate momentum, poor value, moderate quality, moderate sentiment.
Hindustan Zinc plans to spend ₹5,000 crore this financial year on capacity expansion and new mining projects, its chief executive said, after the company more than doubled net profit in the June quarter on higher zinc prices and volumes.
Arun Misra, CEO of Hindustan Zinc, said 80% of the planned capital expenditure will go toward ongoing brownfield projects, with the remaining 20% set aside for new ventures to be announced later.
The company will fund most of the capex through internal accruals, Misra said, and would only consider fresh debt if it lowers the cost of borrowing.
Amit Gupta, chief financial officer, said Hindustan Zinc has enough surplus cash, and the combination of rising production and firm LME prices should allow the company to fund the programme internally. He added that Hindustan Zinc, rated ‘AAA’, will keep all options open, including borrowing if the arbitrage is favorable.
Net profit for the quarter ended June rose to ₹5,469 crore from ₹2,234 crore a year earlier. Misra attributed the jump to the rally in LME zinc prices, a slight uptick in volumes, lower costs, and improved operating efficiency.
He expects LME zinc prices to stay firm in the second quarter, with similar strength in silver output and prices. Hindustan Zinc has sold 38 tonnes of silver forward at about $62 per ounce for the September quarter, Gupta said, adding that the price is slightly above current spot levels.
Zinc demand and prices should remain firm despite the ongoing conflict in West Asia, Misra said. He noted that Europe’s economic activity has not been badly affected by the war because the region relies on gas from Russia and Ukraine via pipeline.
India is partly insulated because it can source fuel from Russia and other suppliers, he said. Hindustan Zinc sells to buyers in West Asia but can pivot to Southeast Asia if needed, Misra added.
The company produces about one million tonnes of zinc annually. Total Indian zinc demand is roughly 850,000 tonnes, and global production stands at about 12-13 million tonnes. That leaves Hindustan Zinc in a relatively secure position, Misra said.
The broader impact of the West Asia crisis on the company has been limited to about $40-50 a tonne, including higher oil and commodity costs, he said.
The company’s expansion plans come as the Indian government pushes for greater domestic mineral processing. Hindustan Zinc’s share price has risen roughly 45% over the past year, tracking the rally in base metals and the company’s stronger earnings.
Drafted by a large language model from the source reporting linked above, then screened by automated publishing checks. It is not read by a journalist before publication. Some articles cite our Alpha Score. Verify prices and figures against the original source. Educational coverage, not personalized advice.