2.45% Dividend Yield: Vedanta-Led Hindustan Zinc Earns Massive Profit Of Rs 2,345 Crore In Q1, Up By 19% YoY

Vedanta Ltd-backed zinc subsidiary, Hindustan Zinc earned big profits in the June 2024 quarter. Q1FY25 PAT jumped by 19% YoY to Rs 2,345 crore, while it registered the highest-ever first quarter mined and refined metal production. PAT and operating profit (EBITDA) are the highest in 5 years. Total sales registered 12% YoY growth.

In the quarter under review, Hindustan Zinc registered a net profit of 2,345 Crore, up 19% y-o-y and 15% sequentially due to higher EBITDA partly offset by higher tax expenses.

Meanwhile, its EBITDA for the quarter was at Rs 3,946 Crore, up 17% y-o-y and 8% q-o-q in line with the revenue from operations and the cost of production.

On the top-line front, HZL's revenue stood at Rs 8,130 Crore, up 12% y-o-y on account of better metal volume and metal & silver prices, further supported by a strong dollar and partly offset by lower silver volume. It is up 8% q-o-q on account of better metal & silver prices and favourable forex rates, partly offset by lower metal & silver volumes.

In terms of productions, the company highlighted that the cost of production before royalty (COP) for the quarter stood at US$ 1,107 (Rs 92,375) per MT, lower by 7% (lower by 6% in INR terms) y-o-y on account of softened coal and input commodity prices, better linkage coal availability and better-mined metal grades, further supported by operational efficiencies year on year. It was up 5% (up by 6% in INR terms) sequentially in line with volume and grade.

On the quarterly performance, Arun Misra, CEO, said: "Hindustan Zinc has started the year on a strong note, recording highest ever first quarter mined and refined metal production, leveraging strong metal prices during the quarter. It also gives me immense pleasure to inform you that we have expedited the commencement of our renewable energy power delivery with the receipt of the first flow of RE power from the Serentica 180 MW solar project in May 2024."

Further, Sandeep Modi, CFO, said: "Ascertaining HZL's global cost leadership, we have suppressed the cost of production for the quarter at $1,107 per tonne, clocking a figure lower than last three financial years. With a holistic focus on operational cum financial excellence, we expanded the margins during the quarter, along with a commendable increase in the domestic primary zinc market share."

Key highlights of the products are:

- Mined metal production for the quarter was 263 kt, recording the highest ever first quarter production. It is up 2% y-o-y on account of improved mined metal grades, and lower 12% q-o-q in line with mine preparation activities being carried out every year in first quarter.

- Refined metal production recorded the highest ever first quarter production at 262 kt, up 1% y-o-y. It is down 4% sequentially in line with the plant availability & pyro operations on lead mode from June 2024. Refined zinc production for the quarter was 211 kt, up 1% y-o-y & down 4% q-o-q.

- Saleable silver production for the quarter was 167 MT, down 7% y-o-y and 12% q-o-q in line with lead metal production and WIP built up in the normal course of the business, on account of pyro operations being run on lead mode from June 2024. This WIP will be liquidated in the subsequent period.

As part of strategic hedging, Company has sold forward 90 kt of zinc production for FY25.

Looking ahead, Misra added, " we are set to accelerate our sustainability journey through contribution towards economic prosperity & environmental responsibility, and diversification by catering to high-end sectors responsibly with our strategic partnerships for utilising waste streams for extracting saleable products and supplying for next-generation nickel zinc batteries."

The company has launched India's first AI-based Digital Integrated Report with GenAI chatbot "Zincky".

On August 2nd, HZL's share price ended at Rs 651.85 apiece, up by 0.7% on BSE with market cap of Rs 2,75,427.42 crore. On the current market price, the company has a dividend yield of 2.45%.

In FY24, the company paid up to 650% dividend worth Rs 13 per share.