Hindustan Zinc Ltd Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Amit Dixit - ICICI Securities Limted - Analyst : Hi. Good evening, everyone, and thanks for the opportunity. Congratulations for a good set of numbers. I have two questions. The first one is essentially on the recent judgment, our by the Supreme Court in which they have mentioned that the state have got the power to levy additional charge or excess or whatever. Now in the past in 2008, I think -- June 2008, and to be precise that just ton government had notified a better environment and helps that actually and we have certain contingent liability on the balance sheet, I think to the extent of INR42 crore as of March 31, 2024. Now, first of all, what are your thoughts on Rajasthan government going ahead and applying our recent retrospective manner, although I understand that the Supreme Court has stayed this particular adjustment for a wide reserve rather than treatment for a while. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 02, 2024 / 10:30AM, HZNC.NS - Q1 2025 Hindustan Zinc Ltd Earnings Call Like what are your thoughts around that? How do you feel that you don't it's a taking advantage of the there could be some other pits or this can be applied retrospectively from 2008 or whatever. Just wanted your thoughts on the same?

Question: Amit Dixit - ICICI Securities Limted - Analyst : And so actually, this amount has remained constant for a while. We know we may be we have recognized the contingent liability when it occurred and it was, I think, INR150 per tonne of ore, if I'm not mistaken. So potentially what would be the liability now, let's say if we were to recalibrate the contingent liability?

Question: Amit Dixit - ICICI Securities Limted - Analyst : Okay. The second one is on your cost essentially the pace, the cost of production first, all great work on that. We have seen the cost declining quarter on quarter. I just wanted to understand, since we are getting more power now from Serentica and coal prices are e-auction, prices are soft. We will get more e-auction prices or linkage from coal, India. So and our costs do like near the level we guided for the full year, I mean in Q4 results. So won't you be -- why any decreasing from giving the revised more optimistic cost guidance at this point in time, whether we expect some escalation in cost going ahead or what is that.

Question: Amit Dixit - ICICI Securities Limted - Analyst : Okay, wonderful. Thank you so much and all the.

Question: Ashish Kejriwal - Nuvama Wealth Management - Analyst : Yeah, hi. Good evening. Thanks for the opportunity. Sir again, the same question, which I'm going to ask about Supreme Court judgment. What you are trying to say that because Supreme Court has already said that royalties on attacks. So there is no question on that. Reverting back only thing is whether it's prospective or retrospective. So you mean to say that even if it is that retrospective, then also we have certain downs to get negotiation with from government and we don't need to pay that amount?

Question: Ashish Kejriwal - Nuvama Wealth Management - Analyst : Okay. So in case -- in the worst case. This will be, I suppose, of -- in the worst case INR150 per tonne of ore produce, whatever we have produced. That could be there in case if it's in the worst case, which I'm trying to look at.

Question: Ashish Kejriwal - Nuvama Wealth Management - Analyst : Okay. So sir, because of this INR142 crores, which was imposed that time, that was on a small amount maybe and out because it's INR150 per tonne of ore produced. And over a year, obviously, we have produced more than 1 million tonne ore on a yearly basis. So in case of retrospective -- so my only point is that even after the Supreme Court judgment, do we have something where we can fight legally with the state government that -- which will not allow us to impose this taxes. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 02, 2024 / 10:30AM, HZNC.NS - Q1 2025 Hindustan Zinc Ltd Earnings Call

Question: Ashish Kejriwal - Nuvama Wealth Management - Analyst : Understood. So on this only, if it perspective then also because INR150 -- INR150 per tonne and they are imposing it right now. So going forward, also maybe they can continue with that?

Question: Ashish Kejriwal - Nuvama Wealth Management - Analyst : But the only thing is 2014 we have seen what happened when Supreme court be allocated all the coal lots and puts us on that. But anyway, that's okay. Second question is, is it possible to give us a cash and debt balance as of first quarter. And I think we invested in this press release this time.

Question: Ashish Kejriwal - Nuvama Wealth Management - Analyst : Okay. And then lastly, we had 90,000 tonnes for this quarter -- for this year. And what will be the average price at which we have hedged this?

Question: Ashish Kejriwal - Nuvama Wealth Management - Analyst : Okay. And this is for 85,000 tons? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 02, 2024 / 10:30AM, HZNC.NS - Q1 2025 Hindustan Zinc Ltd Earnings Call

Question: Ashish Kejriwal - Nuvama Wealth Management - Analyst : Okay. Thank you and all the best sir.

Question: Kirtan Mehta - BOB Capital Markets Ltd. - Analyst : Thank you, sir, for giving this opportunity in terms of your projects, I had couple of questions. Am I audible.

Question: Kirtan Mehta - BOB Capital Markets Ltd. - Analyst : So roaster at Debari, which we are targeting to sort of start during Q4 FY25, how long would it take to ramp up to the full production rate of 160 kt. and how would it contribution to EBITDA will develop over the period?

Question: Kirtan Mehta - BOB Capital Markets Ltd. - Analyst : And what would be additional cost of roaster operations?

Question: Kirtan Mehta - BOB Capital Markets Ltd. - Analyst : Conditions that ended 45 kt zinc production than we delivered in FY26. Basically the additional will be able to ramp up to that rate.

Question: Kirtan Mehta - BOB Capital Markets Ltd. - Analyst : Second was about the fertilizer plant that we are targeting by Q2 FY26. How does it we placed on the global cost curve with our technology.

Question: Kirtan Mehta - BOB Capital Markets Ltd. - Analyst : Sure, sir. And in terms of you also mentioned about the appointment of the global consultant for 2 million tonne run rate development of mine. So what would be the time lines and when would we know about the potential solutions?

Question: Kirtan Mehta - BOB Capital Markets Ltd. - Analyst : Sure, sir. Thanks for this answer. I'll get back into the show. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 02, 2024 / 10:30AM, HZNC.NS - Q1 2025 Hindustan Zinc Ltd Earnings Call

Question: Rashi - Citigroup - Analyst : Yes, on this quick question, any change in slide 25 volume targets?

Question: Rashi - Citigroup - Analyst : And on the linkage coal materialization versus last year, what is the percentage this year and what was it last year?

Question: Rashi - Citigroup - Analyst : So just to be clear 45% is domestic coal not linkage, I mean it's linkage plus e-auction right?

Question: Rashi - Citigroup - Analyst : And you're targeting a percentage down into unified maybe in a year's time, how much should we expect this to be the percentage?

Question: Rashi - Citigroup - Analyst : 13% you said, RE power right versus 8.5%?

Question: Rashi - Citigroup - Analyst : Yes, so 13% compared to 8.5% currently?

Question: Rashi - Citigroup - Analyst : Okay, thank you.

Question: Shweta Dikshit - Systematix Group - Analyst : Could you more details on your return 30, can you speak a little louder, please?

Question: Shweta Dikshit - Systematix Group - Analyst : Yes, is it better now.

Question: Shweta Dikshit - Systematix Group - Analyst : Sir, could you provide more details on Bamnia Kalan mines commencing operations? And what is the expected outlook in terms of volumes from there and when can that potentially come on stream.

Question: Shweta Dikshit - Systematix Group - Analyst : Understood, sir. Thank you so much.

Question: Pallav Agarwal - Antique Stockbroking Ltd. - Analyst : So just wanted your views on the recent decline in across non-ferrous metals and again, a lot of expectation today on Chinese stimulus. But we are not really seeing any of that coming through. And so do you think your prices should stabilize at these levels before given your cost curve or there could be some further fall from now?

Question: Pallav Agarwal - Antique Stockbroking Ltd. - Analyst : So you think any of the known promise on the rate cuts also can help in the sentiment towards commodity prices? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 02, 2024 / 10:30AM, HZNC.NS - Q1 2025 Hindustan Zinc Ltd Earnings Call

Question: Pallav Agarwal - Antique Stockbroking Ltd. - Analyst : So also I think you mentioned the $2.7 billion of target EBITDA and what LME assumptions are we factoring that in?

Question: Pallav Agarwal - Antique Stockbroking Ltd. - Analyst : Yeah. Thank you so much.

Question: Shivang Chauhan - Barclays - Analyst : Good evening all, and thank you for taking my question. My first question is on the zinc price guidance. So the devices that they are now or do we still expect dosing phase 2 at least 3,000 by September, October, then 3,200 by year end. Like you previously guided for, is there any change in guidance we can take?

Question: Shivang Chauhan - Barclays - Analyst : Okay. Thank you. Our next would be on the general reserve and on to retained earnings convergent. I'll have the effect until transfer after the approval. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 02, 2024 / 10:30AM, HZNC.NS - Q1 2025 Hindustan Zinc Ltd Earnings Call

Question: Shivang Chauhan - Barclays - Analyst : So just a follow-up on this, if you could provide any colors on the use of diesel additionally, our balance that you have on maybe towards the CapEx?

Question: Shivang Chauhan - Barclays - Analyst : Makes sense. Yeah, thank you.

Question: Vikash Singh - PhillipCapital (India) Pvt. Ltd. - Analyst : Good afternoon, sir. Thank you for the opportunity. Sir, just wanted to understand, we are already in terms of cost of production. We are already at the high end of our guidance. Let me say that the second half volumes are unusually low and we expect the exit rate to be lower than even a $1,050, which we have added or, we are expecting some other question provisions going forward?

Question: Vikash Singh - PhillipCapital (India) Pvt. Ltd. - Analyst : Silver customs duties have been pretty sharply. And in the current budget, the how we should look at the silver part in the 2Q going forward, any inventory adjustment which could negatively impact us going forward? Or housing, we should look at the pricing part going forward for the silver especially? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 02, 2024 / 10:30AM, HZNC.NS - Q1 2025 Hindustan Zinc Ltd Earnings Call

Question: Vikash Singh - PhillipCapital (India) Pvt. Ltd. - Analyst : Understood. So no inventory adjustment would be required?

Question: Vikash Singh - PhillipCapital (India) Pvt. Ltd. - Analyst : Yeah. Thank you.

Question: Kirtan Mehta - BOB Capital Markets Ltd. - Analyst : Thank you, sir. For giving me another opportunity. Just wanted to touch up based on couple of aspects. One is basically we are increasing the renewable power in our cost mix. So what is the difference with our marginal cost of power purchase between the renewable power and whichever is the highest cost of power for us.

Question: Kirtan Mehta - BOB Capital Markets Ltd. - Analyst : Second thing, we also talked about the developing a low-carbon zinc offering and we are targeting probably the international market for this. So how do we see the global demand for this and what premium that we can derive for low carbon zinc?

Question: Kirtan Mehta - BOB Capital Markets Ltd. - Analyst : How much quantum we will be able to produce in this market?

Question: Kirtan Mehta - BOB Capital Markets Ltd. - Analyst : It will be basically proportional to RE power consumption. That would be exactly the sort of the --

Question: Kirtan Mehta - BOB Capital Markets Ltd. - Analyst : Let's just last one bookkeeping question. What was the mine development run rate during the quarter? And can you indicate between capital and revenue split

Question: Vikash Singh - PhillipCapital (India) Pvt. Ltd. - Analyst : Thank you, sir.