Hindustan Zinc -
Largest and the only integrated producer of Lead, Zinc and Silver in India. Has a 75 pc mkt share in India’s Zinc industry
3rd largest producer of Silver in the world
2nd largest producer of Zinc in the world
Among India’s largest producer of Wind Power with a generation capacity of 274 MW - spread across 5 states
Company’s Mineral resources - Hindustan Zinc’s ore reserves are estimated @ 281 million Tons of material graded @ 4.5 pc Zn, 2.0 pc Pb and 60 gm/ ton of Ag - amounting to 12.68 million tons of Zinc ( Zn ), 5.52 million tons of Lead ( Pb ) and 542 million Ounces of Silver ( Ag )
Company’s Ore reserves - Company’s ore reserves are estimated @ 175 million tons of material graded @ 5.6 pc Zn, 1.6 pc Pb and 55gm/ton of Ag - amounting to 9.86 million tons of Zinc ( Zn ), 2.75 million tons of Lead ( Pb ) and 312 million Ounces of Silver ( Ag )
At current production rates and existing Resources and Reserves ( R&R ) company can sustain 25 yrs of mine life
In FY 23-24, company successfully added 24.7 million tons of material at gross level amounting to 1.85 million tons of metal
Company has set up a dedicated subsidiary - Hindmetal Exploration Services Pvt Ltd - to continuously focus on exploring, discovering, developing and tapping mineral resources. The subsidiary has interest in exploration of all minerals across the globe by implementing best in class technologies and practices
Company currently operates 8 underground mines @ 5 locations in Rajasthan
Ore mined in FY24 vs FY 23 @ 16.5 vs 16.7 million tons
Zinc metal mined in FY 24 vs FY 23 @ 0.855 vs 0.839 million tons
Lead metal mined in FY 24 vs FY 23 @ 0.168 vs 0.165 million tons
Q2 FY 25 results and concall updates -
Revenues - 8242 vs 6792 cr, up 22 pc
EBITDA - 4164 vs 3122 cr, up 33 pc ( margins @ 50 vs 46 pc )
PAT - 2389 vs 1729 cr, up 38 pc
India is expected to become the third largest Zinc consumer by 2026 - a key positive for the company
Mined metal production ( Zn + Pb ) in Q2 was @ 0.256 million tons, up 2 pc YoY
Refined metal production ( Zn + Pb ) in Q2 was 0.262 million tons, up 8 pc YoY
Silver production stood at 184 Tons, up 2 pc YoY
Company has achieved a 6 pc reduction in unit cost of production, along with supportive metal prices to achieve 38 pc PAT growth on a YoY basis
Company’s 5.1 lakh tons per annum fertilizers plant is under construction @ Chanderia. It ll be producing DAP fertiliser and NPK nutrients. Likely to go live by Q2 FY 26
Company’s 1.6 lakh tons per annum roast smelter ( using roast leach electro technology ) is likely to go commercial by Q4 FY 25
Company has entered into a 25 yr long renewable power purchase agreement with Serentica ltd - this would @ a fixed flat rate of energy buying without any inflation and would help the company move towards its sated goal of reducing costs to $ 1000 / Ton
In Q2, cost of production ( COP ) for Zinc stood @ $ 1071 / Ton - lower by 6 pc YoY
Current share of renewable power being used by the company in around 14 pc. By the end of Q4, company expects to hit a share of renewable power @ 24-25 pc, This should further help reduce the COP/Ton. Company is striving to achieve $ 1050 / ton - COP by end of Q4 FY 25
The fertiliser plant that the company is expected to commission next yr has the potential to do peak EBITDA of 450 - 500 cr / yr
For H2, company has hedged 1 lakh ton of Zinc @ $ 3008 per ton and 83 tons of Silver @ $ 32.26 per ounce
H2 is generally better for the company in terms of volumes vs H1
Disc: holding, biased, not SEBI registered, not a buy/sell recommendation
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