Hindustan Zinc Limited: H1 FY25 Performance, Dividend lovers stock

Hindustan Zinc Limited – Comprehensive Performance Report

Executive Summary

Hindustan Zinc Limited (HZL) demonstrated robust operational and financial performance in Q2 and H1 FY25, with record-breaking production metrics and strong profitability. Positioned as a global leader in zinc and silver production, HZL leverages integrated operations, cost leadership, and ESG initiatives to ensure long-term growth.

Company Overview

Hindustan Zinc Limited, a subsidiary of Vedanta Limited, is India’s largest and the world’s second-largest integrated zinc-lead producer. It is also the only silver producer through the primary route in India. With diversified operations, HZL continues to strengthen its position as a key player in global metal markets.

Performance Highlights

Production Metrics

Mined metal production in Q2 FY25: 256,000 tons (↑ 2% YoY)
Refined metal production: 262,000 tons (↑ 8% YoY)
Silver production: 184 tons (↑ 2% YoY)

Financial Performance

Revenue Q2 FY25: ₹8,252 crores (↑ 22% YoY)
H1 FY25 revenue: ₹16,382 crores (↑ 16% YoY)
EBITDA margin: >50%
Net profit Q2 FY25: ₹2,327 crores (↑ 35% YoY)

Cost Control

Q2 cost of production (COP) stood at $1,071 per ton, the lowest in four years, driven by operational efficiencies and increased renewable energy usage.

Key Metrics

Market Cap

₹1,90,731 Cr.

Current Price

₹451

High / Low

₹808 / 285

Stock P/E

21.7

Book Value

₹18.1

Dividend Yield

6.41%

ROCE

46.2%

ROE

55.2%

Metric	Value
Face Value	₹2.00
Debt	₹14,016 Cr.
Reserves	₹6,797 Cr.
No. Eq. Shares	423 Cr.
Chg in Promoter Holding (3 Years)	0.01%
Sales Growth (3 Years)	8.54%
Profit Growth (3 Years)	0.24%
Sales	₹31,232 Cr.
Operating Profit Margin (OPM)	48.8%
Quarterly Sales Variation	21.4%
Profit After Tax (PAT)	₹8,797 Cr.

Future Growth and Expansion Plans

Expansion to 2 Million Tons

Plans to achieve 2 million tons annual mine run rate leveraging 30 million tons of metal-in-ore resources
Global contractors finalization by November 2024
Production ramp-up expected by FY27

Fertilizer Plant

DAP/NPK fertilizer plant commissioning by Q3 FY26
Projected EBITDA contribution: ₹450-₹500 crores annually

Renewable Energy Initiatives

Partnership with Serentica Renewables for 530 MW capacity
Target: 70% renewable energy usage
Expected annual carbon emissions reduction: 69%

Market Outlook and Strategic Positioning

India projected to become third-largest zinc consumer by 2026
Hedging strategy: Zinc at $3,008 per ton, Silver at $32.26 per troy ounce
Strong market support from economic policies in China and U.S.

Capex and Financial Projections

Focus on new roasting and fertilizer projects
Enhancement of mining infrastructure
Expected net debt reduction to ₹2,000 crores by March 2025

ESG Initiatives

Recognition for tax transparency and ESG excellence
Pioneering all-women mine rescue teams
Zero hunger initiatives
Development of zinc-based battery technologies

Risk Factors

Commodity Price Volatility

Fluctuations in global zinc, lead, and silver prices could impact margins.

Regulatory Challenges

Potential policy changes related to mining leases and environmental compliance.

Operational Risks

Safety incidents and technical challenges in projects like the fumer ramp-up.

Disclaimer: This report is for informational purposes only and does not constitute investment advice. The information presented is based on publicly available data and company disclosures. Readers are advised to perform their own due diligence and consult a financial advisor before making investment decisions. Neither the author nor any affiliates accept liability for losses arising from the use of this report.

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