Hindustan Zinc Ltd Q4 2025 Earnings Call Transcript

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

Question: Amit Dikshit - ICICI Securities - Analyst : Yeah, hi. Good evening, everyone. Congratulations for a good performance. I have two questions. The first one is actually on the guidance, particularly for cost of production in silver. So if I look at cost of production guidance for FY26, that is higher by $50 per tonne compared to Q4, I mean, at the lower end of the range. So just wanted to understand the reason for the same. Do you expect any element of fourth to rise? Or what is the thinking that goes ahead? Because our production, we have guided it will also rise. So just wanted to understand that particular aspect. The second bit on guidance is on silver volume. Now silver volume, if I compare it with FY24, I'm not comparing it with FY25, we see that the guidance for FY26 is lower than the actual volume achieved for FY24. So is it that we will be doing more of zinc this year and less of lead and silver at this stage? That's why the guidance hasn't kept way?

Question: Amit Dikshit - ICICI Securities - Analyst : Okay. Great. And the second one is actually a very interesting comment you made on implementing an innovative technology called recovery of lead and silver from smelter waste. So can you throw some more light on this innovative technology and we are successful at Dariba. Will it be extended to the other parts of the company as well?

Question: Amit Dikshit - ICICI Securities - Analyst : Just two subparts here. One is that since you mentioned that it will be of and it won't involve burning and also will it be more environmental friendly in that case?

Question: Amit Dikshit - ICICI Securities - Analyst : And can you just repeat the number that you mentioned in the prepared remarks on the additional volume of silver and that we expect?

Question: Amit Dikshit - ICICI Securities - Analyst : Okay. Great, sir. Thank you and all the best.

Question: Manav Gogia - YES Securities (India) Ltd - Analyst : Hello. Hi. A very good evening and thank you for the opportunity.

Question: Manav Gogia - YES Securities (India) Ltd - Analyst : I'm on the handset mode. Is it better now? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 25, 2025 / 10:30AM, HZNC.NS - Q4 2025 Hindustan Zinc Ltd Earnings Call

Question: Manav Gogia - YES Securities (India) Ltd - Analyst : Hello?

Question: Manav Gogia - YES Securities (India) Ltd - Analyst : Hello? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 25, 2025 / 10:30AM, HZNC.NS - Q4 2025 Hindustan Zinc Ltd Earnings Call

Question: Manav Gogia - YES Securities (India) Ltd - Analyst : Yes, really sorry for the trouble. First of all, congratulations, sir, on the good performance for the quarter. So I wanted to ask one particular question on how should we see the power cost going forward? We have mentioned the increase of renewable energy in the share, what would be that percentage for Q4, where we stand right now?

Question: Manav Gogia - YES Securities (India) Ltd - Analyst : Got it. Got it. And sir, can you just provide me the split of the percentage of domestic coal that we have in our coal mix right now?

Question: Manav Gogia - YES Securities (India) Ltd - Analyst : Okay. Okay. Sure, sir. And sir, secondly, for the zinc alloy plant, can you give me the generated EBITDA for this particular quarter and the past?

Question: Manav Gogia - YES Securities (India) Ltd - Analyst : Sure, got it. So I'll rejoin for more questions then. Thank you so much.

Question: Pallav Agarwal - Antique Stock Broking Ltd - Analyst : Yes, good evening, sir. So I just want to check what was the strategic hedging gains that were booked during FY25 and whether we have any more outstanding hedges right now?

Question: Pallav Agarwal - Antique Stock Broking Ltd - Analyst : Sure, sir. And also, just coming back to, again, cost of production. So I think you've been the sensitivity levels, we have seen that zinc and lead spot prices have been violate. So current spot price below the FY25 average levels. So assuming this continues, can our cost savings offset the negative impact of lower LME prices?

Question: Pallav Agarwal - Antique Stock Broking Ltd - Analyst : Sir, lastly on silver, we had a target of 1,000 tonnes. So what is like is it grades? What is hampering our ramp-up to that 1,000 tonne level in silver?

Question: Pallav Agarwal - Antique Stock Broking Ltd - Analyst : Sure, sir. Yes, thank you.

Question: Raashi Chopra - Citigroup - Analyst : Thank you. Just to understand on the costs, and you have missed it. On a sequential basis, the improvement, you also see an improvement in the coal prices or this was more metal grade and better volume sequentially? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 25, 2025 / 10:30AM, HZNC.NS - Q4 2025 Hindustan Zinc Ltd Earnings Call

Question: Raashi Chopra - Citigroup - Analyst : Right. So coal prices are also lower sequentially?

Question: Raashi Chopra - Citigroup - Analyst : Okay. And the heading gains that you mentioned, how much of them were recorded in the fourth quarter?

Question: Raashi Chopra - Citigroup - Analyst : Okay. My next question is on the CapEx. The total CapEx I think is about INR4,300 crores, right, for the year?

Question: Raashi Chopra - Citigroup - Analyst : Okay. So how do you break that up between the growth in sustaining?

Question: Raashi Chopra - Citigroup - Analyst : And sustaining should continue until the next year --

Question: Raashi Chopra - Citigroup - Analyst : Got it. Yes, thank you.

Question: Ashish Kejriwal - Nuvama Institutional Equities - Analyst : Yes, hi, good evening. Thanks for taking my question. Sir, two things. Is it possible to share our average coal price and sulfuric acid prices in fourth

Question: Ashish Kejriwal - Nuvama Institutional Equities - Analyst : So what's the change, sir, I'm not asking for the absolute number, but is it possible to share how much price increase we have witnessed in sulfuric acid? And how much price reduction we have seen in coal in this quarter versus third quarter?

Question: Ashish Kejriwal - Nuvama Institutional Equities - Analyst : And entire for this because of coal?

Question: Ashish Kejriwal - Nuvama Institutional Equities - Analyst : Okay. And second, for last 6 weeks, we have been saying that we are preparing for the next phase of growth where we plan to expand our mine metal from 1.2 million to 1.5 million and then 2 million tonnes. But we haven't heard anything of that -- so by when we can expect some announcement or it's too early to comment on that.

Question: Ashish Kejriwal - Nuvama Institutional Equities - Analyst : So we are moving ahead to 2 million tonnes, and we can expect an announcement related to that within next quarter?

Question: Ashish Kejriwal - Nuvama Institutional Equities - Analyst : Okay. So even after that, do we think that we will have our mine metal or mine reserves, which normally we have 25 years plus. So are we working on those lines also to maintain our mine reserves for --

Question: Ashish Kejriwal - Nuvama Institutional Equities - Analyst : And sir, lastly, in case we are going for a huge CapEx then? And then is there any capital allocation policy that beyond some net debt to EBITDA or something that will not go ahead with it?

Question: Ashish Kejriwal - Nuvama Institutional Equities - Analyst : Okay. No, because why I'm asking you because we normally give higher dividend also. So both these will do one to hand.

Question: Ashish Kejriwal - Nuvama Institutional Equities - Analyst : That's great. Lastly, only when we are saying 1 million to 2 million tonnes, it will be in phases. So from 1.2 million, can we expect 1.5 million and then 1.8 million or something?

Question: Ashish Kejriwal - Nuvama Institutional Equities - Analyst : Okay. Great, sir. Thank you and all the best.

Question: Jainam Shah - Indsec Securities - Analyst : Yes sir, Am I audible?

Question: Jainam Shah - Indsec Securities - Analyst : Yes, so congratulations on the good set of results. My question would be that in the opening comments, you said that zinc will be in deficit going forward, right? But recently, we saw the zinc outlook by international zinc study group, and they said that it is going to be in surplus. So just wanted to understand what is your theory and how that deficit is going to be for FY25?

Question: Jainam Shah - Indsec Securities - Analyst : So sir, your deficit is based on India as a whole as a standalone, right?

Question: Jainam Shah - Indsec Securities - Analyst : Okay. And also, sir, on silver, we basically have a very lower guidance when it comes to silver sales and production. Why is that just give an idea?

Question: Jainam Shah - Indsec Securities - Analyst : Okay. Understood. And sir, I just like to answered the previous participant when you were saying that they're going to go from 1.2 million to 1.5 million. Can you specify a time line for that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 25, 2025 / 10:30AM, HZNC.NS - Q4 2025 Hindustan Zinc Ltd Earnings Call

Question: Jainam Shah - Indsec Securities - Analyst : So can we assume that by FY27 then we'll be able to reach that 1.5 million tonnes?

Question: Jainam Shah - Indsec Securities - Analyst : Okay. Thank you, sir. Thank you for help.

Question: Sumangal Nevatia - Kotak Securities - Analyst : Yes, thank you, sir, for the chance. Sir, first question is to reach 1.2 million tonnes in terms of mine metal production. What is the constraint? Because since longer capacity is now 1.2 million tonne production guidance is still well below that. This year also, we are almost plan below that. So just want to understand what is the constraint, is it on the selling capacity? Or is it the grade or some other factor?

Question: Sumangal Nevatia - Kotak Securities - Analyst : Okay. So in the past, you've also sold mine metal refined or (multiple speakers) --

Question: Sumangal Nevatia - Kotak Securities - Analyst : Understood. Understood. Sir, can you remind us how many -- which all mines and what proportion of today's production will be coming up for reauction in FY31?

Question: Sumangal Nevatia - Kotak Securities - Analyst : Yes, that's right sir.

Question: Sumangal Nevatia - Kotak Securities - Analyst : Okay. And sir, the next phase of expansion, will we be spending and working on capacity expansion at the mines which are expiring in '31?

Question: Sumangal Nevatia - Kotak Securities - Analyst : Okay, sir. So we are of the view that we will be able to retain the mine given the option of first right of refusal. Is that the right way to understand?

Question: Sumangal Nevatia - Kotak Securities - Analyst : Okay. So because it is -- I mean, if you can get -- give us some more clarity on the thought process because this is a very substantial development.

Question: Sumangal Nevatia - Kotak Securities - Analyst : Okay. Okay. So do we expect any change in policy or we are confident of retaining it by matching the bid -- higher bid?

Question: Sumangal Nevatia - Kotak Securities - Analyst : Okay. Okay. And can you share what is the change in royalty we are anticipating in our internal estimates we are kind of spending so working towards expansion at these lines?

Question: Sumangal Nevatia - Kotak Securities - Analyst : Understood. All right, sir, that's all. Thank you and all the best to the team.

Question: Prateek Singh - DAM Capital Advisors Ltd - Analyst : Hi, thanks for the opportunity. So as a policy, given the volatility that we're seeing right now in commodity prices, and you said that 28 and the 29 and zinc is something which you see coming or you're comfortable with. If you see that kind of a pricing would we be open to hedge again opportunistically or hedging right now?

Question: Prateek Singh - DAM Capital Advisors Ltd - Analyst : And just politically from your experience, if you really want to hedge, what the quantity can you hedge back I mean, obviously, you cannot hedge there's a cap on how much you can hedge. So from our experience, what kind of quantity we can hedge if we really want to?

Question: Prateek Singh - DAM Capital Advisors Ltd - Analyst : Understood, sir. And is there headroom instrument of silver as well?

Question: Prateek Singh - DAM Capital Advisors Ltd - Analyst : Okay, understood. And sir, we have seen gold silver also kind of is considered a store of value like gold along with that, the industrial application of silver also quite decent. So in your view, what is it that's holding silver behind? I mean, why is it not falling gold, the gold or silver ratio is that time right now. So what is it that holding back?

Question: Prateek Singh - DAM Capital Advisors Ltd - Analyst : Thanks. And my last question correct that there has been a delay. I think the last call was supposed to come mid-Feb, now we are saying mid-1Q?

Question: Prateek Singh - DAM Capital Advisors Ltd - Analyst : Understood, sir. Thanks. That's all from my side and all the best. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 25, 2025 / 10:30AM, HZNC.NS - Q4 2025 Hindustan Zinc Ltd Earnings Call

Question: Aditya Welekar - Axis Securities - Analyst : Yes, thanks for the opportunity. So just one question once again on the labor silver production guidance of INR700 to INR710. So is it fair to assume that in '27 and post that this level will be a sustainable level or it can fall or it can rise to 800 million tonnes, means depending upon the Zawar mine silver grade. So if you can throw some light on that?

Question: Aditya Welekar - Axis Securities - Analyst : Got it, sir. Thanks a lot.

Question: Sumangal Nevatia - Kotak Securities - Analyst : Okay. That's it for me. Thanks.