Regardless of the worldwide volatility, India’s infra progress has held regular with metal demand rising, and different segments like vehicle contributing in direction of it, mentioned Arun Misra, MD and CEO, Hindustan Zinc Ltd.
For the quarter ending March 31, 2025, income was ₹9,000 crore (up 20 per cent y-o-y), whereas earnings had been at ₹3,000 crore (up 47 per cent).
In an interview to businessline, Misra spoke in regards to the worth outlook and demand for zinc, affect of geopolitical pressure on capex, the price of manufacturing steering and deliberate foray into essential minerals. Edited excerpts:
What kind of zinc worth motion is predicted?
Contemplating the present geopolitical situation and volatility in prices, it’s unlikely that zinc will attain the $3,000-3,200/tonne vary highs. This fiscal, prices needs to be within the $2,600–2,750 / tonne bracket. If the world order stabilises then could also be $2,800/tonne could be a greater place. Nevertheless, these proceed to be decrease than FY25 exit prices of $2,875/ tonne (common).
Any direct affect of Trump tariffs?
I don’t suppose so. The US is reliant totally on Canada for zinc provides. Not India. And it’s unlikely that zinc provides from Canada make manner to India, primarily due to the present logistical challenges – primarily the space.
Indian demand for zinc stays fairly sturdy pushed by segments like cars, infra and metal, whereas vitality transition necessities will drive lead and silver demand.
In accordance to the Worldwide Lead and Zinc Examine Group, world demand for refined zinc is predicted to rise by 1.6 per cent to attain 14.04 million tonnes (mt) in 2025. This enhance in demand will largely be led by growing consumption in India and Korea adopted by some assist from China’s automotive and electrical sectors. The demand for refined lead is anticipated to develop by 1.9 per cent to 13.39 mt in 2025 led by the expansion of lead acid battery segments in China, India and Vietnam.
What’s the FY26 manufacturing steering?
For FY26, manufacturing goal is 1,125kt, plus or minus 10kt (kilo tonnes), for mined metallic, 1,100 kt plus or minus 10 kt for refined metallic, and 700–710 tonnes for silver.
Silver manufacturing declined 8 per cent YoY in FY25 to 687 tonnes, in contrast to 746 tonnes in FY24, largely due to a better contribution from pyro lead operations within the prior yr. Silver volumes in FY26 are anticipated to remain under FY24 ranges, with steering within the vary of 700–710 tonnes, with there being transition in direction of zinc-lead working mannequin. The silver output has the potential to exceed 1,000 tonnes as soon as mined metallic capability scales up to 1.5 mt.
For FY26, complete capex is guided at ₹4,900–5,400 crore, comprising ₹1,900–2,200 crore for progress capex and ₹3,000 – 3,200 crore for upkeep capex. As in opposition to this, FY25 capex stood at ₹4,400 crore, with ₹1,500 crore directed in direction of progress initiatives and the steadiness allotted in direction of sustenance capex.
Contemplating the modified worth steering, what could be its affect on internet income and progress capex?
In FY25, our free money flows had been within the $1–1.1 billion vary. Backside-line administration occurred following decrease value of manufacturing and improved quantity gross sales. This fiscal, we anticipate comparable free money technology (FY25 degree). And, we don’t see drawback there.
By way of undertaking financing, the primary part of $1–1.1 billion progress capex plans (to enhance manufacturing to 2 mt of mined metallic), will quickly be offered to the Board for approval. Possibly in one other month it’ll occur.
The capex could be mixture of debt and fairness. See, in any given yr, the max utilisation of free money movement in direction of capex could be within the $0.5 billion plus (round ₹5,000 crore) vary. So, the remainder could have to be managed by way of debt. Elevating debt wouldn’t be an issue contemplating our free money movement, decrease internet debt place and our market capitalisation – the best amongst zinc producers globally.
What’s the debt place?
In FY25, the web debt got here down to ₹1,169 crore; as in opposition to September 2024, when it was ₹5,720 crore.
Is it potential to quantify the price advantages?
Hindustan Zinc concluded FY25 with zinc value of manufacturing at $1,052/tonne, supported by improved ore grades, larger by-product gross sales, softer coal and enter prices, and elevated reliance on home coal and renewable vitality (RE).
For FY26, the price of manufacturing is probably going to hover within the $1,025–1,050 / tonne vary, underpinned by enhanced RE integration and favorable coal value dynamics.
The RE share is predicted to rise considerably from 13 per cent in FY25 to 30-35 per cent in FY26, driving a projected discount of $10–15/tonne in energy prices. By FY28, the RE integration is predicted to be round 70 per cent.
You probably did plan to foray into essential mineral mining. Any replace?
We now have created a vertical that can support our foray into valuable metals and demanding mineral initiatives in India. We received a gold mine in Rajasthan and a tungsten block in Andhra Pradesh. Exploration actions will begin as we get some paperwork completed. It might take 2–3 years to begin mining actions in these blocks. We’re additionally bidding for different mineral blocks like potash and lithium.
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