Hindustan Zinc’s Earning Falls 36.5% Due To Low Zinc, Lead Prices

Hindustan Zinc on Friday reported a fall in first-quarter profit, dragged by weak zinc and lead prices, and despite reduced expenses and tax burden.

The company's consolidated net profit fell 36.5 per cent to Rs 1,964 crore.

Revenue from operations fell to Rs 7,111 crore from Rs 9,236 crore a year ago, which it attributed to lower zinc and lead prices and lower lead volumes - though it was partially offset by higher zinc volumes and silver prices.

Prices of zinc and lead on the London Metal Exchange, on which Hindustan Zinc is registered, have fallen from last year amid persistently high-interest and tepid demand, especially from top metals consumer China due to a stalling post-pandemic recovery.

Zinc is primarily used in making galvanised steel, which is used in the construction and automotive industries.

The company's integrated zinc production was up 1 per cent on-year at 209,000 metric tons, while lead output was down 6 per cent and silver was up 1 per cent.

Zinc's cost of production before royalty was down 5.6 per cent, aided by softened coal and commodity prices, the company said.

Total expenses fell 1.4 per cent, while net tax expenses were down 59 per cent.

The mined metal and refined metal production in FY24 is expected to be higher than last year, the company said in a statement.

Zinc's cost of production in FY24 is expected to be flat on-year, while project capex for the year is expected to be in the range of USD 17.5-20 crore, it said.

The Indian government may delay the plan to sell its shares in Hindustan Zinc, sources told Reuters on Wednesday.

Shares of Hindustan Zinc fell 1.8 per cent after the results. The shares rose 3.07 per cent in the June quarter, compared to a fall of 22.24 per cent in the year-ago period.