Hindustan Zinc Ltd. reported a 142% increase in consolidated net profit to ₹6,412 crore for the second quarter ended September 30, 2026. This is up from ₹2,649 crore in the same period last year. Revenue from operations rose 76.5% to ₹15,093 crore, compared to ₹8,549 crore, driven by higher metal prices and lower production costs.
Cost and Revenue Drivers
The company's earnings benefited from a significant drop in the cost of production (CoP). It fell to $703 per tonne in Q2 from $851 per tonne in the previous quarter. This reduction was due to higher earnings from by-products like sulphuric acid and an increase in sales volumes. Sales volumes for refined metals rose 8% to 0.26 million tonnes. Silver prices averaged $62.6 per ounce in Q2, up nearly 60% year-on-year. However, analysts warn that silver prices have recently dropped to around $58 per ounce, which could impact future earnings.
Brokerage Emkay Global Financial Services kept a Buy rating on Vedanta, Hindustan Zinc's parent company. They set a target price of ₹350, suggesting a potential upside of about 44% from the current market price of ₹243. The brokerage noted that Hindustan Zinc's strong performance supports Vedanta's earnings growth outlook for FY27.
Future Guidance
Hindustan Zinc has updated its FY27 CoP guidance to $825-850 per tonne. This is down from earlier estimates of $975-1,000 per tonne. This change reflects the company's improved operational efficiency and the effect of rising sulphuric acid prices due to supply disruptions. The management aims to keep production guidance at 1.1 million tonnes for FY27, which is about 5% higher than last year.
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The strong earnings report is likely to boost investor confidence in Vedanta, which relies heavily on Hindustan Zinc for profits. Higher metal prices and lower production costs may positively affect the mining sector, especially for companies focused on zinc and silver.
Watch for further updates on metal prices and production guidance in the upcoming earnings reports from other mining firms.
Based on reporting by: livemint.com