Hindustan Zinc Limited (NSE: HINDZINC), a Vedanta Group company and India’s largest primary zinc producer, has reported its highest-ever quarterly profit after tax of ₹3,916 crore in the third quarter of fiscal year 2026. This marks a 46 percent year-on-year surge, underpinned by record revenue, a strong contribution from its silver business, efficient cost management, and new project execution. The company also exited the quarter in a net cash position, reinforcing its financial resilience and capacity for long-term capital deployment.
How did Hindustan Zinc Limited deliver its strongest-ever quarterly earnings in Q3 FY26?
For the quarter ended December 31, 2025, Hindustan Zinc Limited posted consolidated revenue of ₹10,980 crore, representing a 28 percent sequential increase and 27 percent growth compared to the same period in the previous year. This all-time high topline was supported by both pricing tailwinds and operational throughput.
Silver emerged as a key earnings lever. Silver revenue grew by 83 percent year-on-year to ₹2,676 crore, boosted by a 74 percent rise in average realized prices. Silver now accounts for 24 percent of Hindustan Zinc Limited’s quarterly revenue but contributes a striking 44 percent to quarterly profit after tax, confirming its shift from a by-product to a central margin driver.
Refined zinc production reached 221,000 tonnes in Q3 FY26, a rise of 10 percent over the previous quarter and 8 percent over the previous year. The company also benefited from favorable zinc pricing, with the London Metal Exchange average for zinc climbing to $3,165 per tonne, up 12 percent quarter-on-quarter.
Higher production and prices, combined with lower energy costs and optimized smelting operations, led to ₹6,087 crore in EBITDA, a 36 percent sequential and 34 percent annual increase. This translated into a record EBITDA margin of 55 percent, expanding 320 basis points quarter-on-quarter.
What role did silver and zinc cost efficiency play in Hindustan Zinc Limited’s margin strength?
Hindustan Zinc Limited achieved a five-year low in zinc cost of production at $940 per tonne during the quarter. This was a 5 percent sequential and 10 percent annual improvement. The cost reduction was primarily driven by higher usage of domestic coal, which lowered power costs, and improved by-product realizations.
The contribution from silver was not merely financial. It structurally altered the margin composition. With silver prices averaging $54.7 per ounce during the quarter, nearly 75 percent higher than the previous year, the company’s integrated lead-zinc-silver portfolio demonstrated strong counter-cyclicality.
Operationally, the company also completed debottlenecking of its Chanderiya smelter during the quarter. This, along with earlier enhancements at Dariba, added 21,000 tonnes per annum of refined zinc capacity. This smelter optimization translated directly into higher throughput and lower per-unit fixed costs, supporting the margin expansion.
How is Hindustan Zinc Limited deploying its balance sheet to fund long-cycle growth?
As of December 31, 2025, Hindustan Zinc Limited had total borrowings of ₹9,013 crore and gross investments and cash equivalents of ₹9,342 crore. This shifted the company into a net cash position of ₹329 crore, a marked improvement from a net debt of ₹2,547 crore just a quarter earlier.
This liquidity supports multiple long-horizon capital projects. A 250,000 tonnes per annum refined metal expansion is now underway with engineering contracts secured and site mobilization in progress. The expected completion timeline is the second quarter of fiscal year 2029.
Separately, India’s first 10 million tonnes per annum tailings reprocessing facility at Rampura Agucha has reached the EPC stage. Once operational by the fourth quarter of fiscal year 2028, this project is expected to enhance metal recovery, extend mine life, and reduce environmental impact.
The company is also building a 510,000 tonnes per annum fertilizer plant with commissioning expected in the first quarter of fiscal year 2027. In parallel, a novel hot acid leaching technology is being deployed at Dariba for the recovery of lead and silver from smelting waste, targeted for completion by the end of fiscal year 2026.
These projects indicate a deliberate capital allocation strategy geared toward integrated metal recovery, critical mineral leverage, and product diversification.
How does Hindustan Zinc Limited’s entry into tungsten mining support its critical minerals narrative?
During the third quarter, Hindustan Zinc Limited was declared the successful bidder for the Balepalyam tungsten block in Andhra Pradesh. This is the company’s first formal step into strategic mineral diversification beyond zinc, lead, and silver.
Tungsten is considered a critical input for defense, electronics, and industrial tooling. By expanding into this mineral class, Hindustan Zinc Limited is positioning itself to benefit from India’s resource security agenda and global decarbonization-linked demand for high-performance metals.
This diversification strategy aligns with broader portfolio recalibrations seen across mining majors globally. While still early-stage, the Balepalyam project signals a credible attempt to evolve into a broader energy transition metals platform.
What ESG leadership credentials reinforce Hindustan Zinc Limited’s market positioning?
Hindustan Zinc Limited retained the No. 1 global ranking in the metals and mining category of the S&P Global Corporate Sustainability Assessment for the third consecutive year. The company also became the first Indian member of the International Council on Mining and Metals in 2025, marking a significant global governance milestone.
Its FY25 Integrated Annual Report was ranked first in India and sixth globally, winning the Platinum award at the LACP Spotlight Awards. Beyond recognition, the company has operationalized its green logistics strategy with the deployment of 10 electric bulker trucks at its Debari smelter, with plans to scale this to 40 units.
Hindustan Zinc Limited’s EcoZen brand—Asia’s first low-carbon green zinc product—is produced using renewable energy and has a carbon footprint 75 percent below the global average. This offering could become especially relevant for global industrial clients facing Scope 3 reporting pressures.
The company’s workforce inclusion practices were also recognized through the Ardhanarishwar Award for transgender inclusion and accolades in CSR and managerial excellence. These layered ESG signals strengthen Hindustan Zinc Limited’s institutional appeal and broaden its base beyond commodity investors.
What are the key execution risks and strategic watchpoints going forward?
Despite the headline momentum, there are emerging watchpoints. Refined lead production fell 11 percent sequentially and 16 percent year-on-year in the third quarter, contributing to a 14 percent year-on-year drop in lead revenue over nine months. Silver production for the nine-month period also declined 12 percent year-on-year, even as pricing gains more than offset the shortfall.
Zinc production cost advantages could compress if domestic coal availability tightens or international energy prices reverse. Project delays or cost overruns in the fertilizer or tailings reprocessing initiatives could impact the capital return profile, especially as long-cycle projects move from design to execution.
Global price volatility in zinc and silver, foreign exchange movement, and regulatory shifts in mining policy remain external risk factors. Additionally, the strategic expansion into tungsten and other critical metals will require regulatory clearances and technological absorption capacity that may not scale as predictably as core smelting operations.
Nonetheless, the company’s operating leverage, diversified metal base, low-cost profile, and strong balance sheet provide meaningful headroom to navigate these risks.
What does institutional sentiment signal about Hindustan Zinc Limited’s forward trajectory?
With a 35 percent total shareholder return for the nine-month period, Hindustan Zinc Limited has significantly outperformed the Nifty Metal index, which delivered 14 percent over the same period. Its dividend payouts of ₹10 per share and transition from net debt to net cash reinforce investor confidence in the company’s capital discipline.
Analysts are likely to monitor three pillars going forward: sustained margin delivery through cost control, successful execution of the expansion and circular economy projects, and further progress on strategic mineral diversification.
As the company positions itself not just as a metal producer but as an energy transition metals platform, future investor engagement may also tilt toward ESG-focused capital pools and institutions seeking exposure to domestic critical mineral supply chains.
Key takeaways on what Hindustan Zinc’s record Q3 FY26 performance signals for shareholders and the mining industry
- Hindustan Zinc posted its highest-ever quarterly profit after tax of ₹3,916 crore, a 46% YoY increase.
- Revenue hit a record ₹10,980 crore in Q3 FY26, with silver contributing over 24% of sales and 44% of profits.
- Zinc cost of production fell to a five-year low of $940/tonne, aided by domestic coal usage and by-product credits.
- The company maintained an EBITDA margin of 55% and recorded ₹6,087 crore in EBITDA for the quarter.
- Balance sheet strengthened to a net cash position of ₹329 crore from ₹2,547 crore in net debt last quarter.
- Capex-heavy projects are underway, including a 250 ktpa metal expansion and India’s first 10 Mtpa tailings plant.
- ESG leadership was reinforced with top S&P Global rankings and green logistics adoption via 40 EV bulkers.
- The firm’s EcoZen brand offers low-carbon zinc with 75% lower emissions than the global average.
- Institutional sentiment remains positive, with TSR of 35% vs 14% for Nifty Metal over the 9M FY26 period.
- Diversification into critical minerals like tungsten signals a broader strategic pivot aligned with transition goals.
Discover more from Business-News-Today.com
Subscribe to get the latest posts sent to your email.
