Hindustan Zinc Records Stellar FY26 Performance, Profit Soars 34%

Net Profit: ₹13,832 crore (up 34% YoY)
Revenue from Operations: ₹40,844 crore (up 20% YoY)

Reader Takeaway: Record production and cost efficiencies boost profits; capacity expansion and diversification offer growth.

What just happened

Hindustan Zinc announced its financial results for the fiscal year 2025-26, showcasing a significant 34% year-on-year increase in net profit to ₹13,832 crore. Revenue from operations grew by 20% to ₹40,844 crore, while EBITDA saw a 27% jump to ₹22,162 crore, maintaining an impressive EBITDA margin of 54%. The company achieved a record mined metal production of 1,114 kilotonnes (kt) and reduced its zinc cost of production (ex-royalty) to a 5-year low of US$ 959 per tonne, down 9% year-on-year.

Why this matters

The strong financial performance indicates robust operational efficiency and favourable market conditions, particularly for silver prices which contributed significantly to profitability. The company's strategic growth initiatives, 'HZL 2.0', including a substantial capital expenditure plan and diversification into critical minerals, signal a clear long-term expansion and value creation strategy for shareholders.

The backstory

In the previous fiscal year (FY25), Hindustan Zinc had reported a profit of ₹10,353 crore on revenues of ₹34,083 crore. The company has consistently focused on cost optimization and expanding its production capacity, with initiatives like increasing domestic coal usage and renewable energy share contributing to cost leadership.

What changes now

Hindustan Zinc is embarking on a significant expansion, aiming to double refined metal capacity to 2.0 million tonnes per annum (Mtpa) through its 'HZL 2.0' strategy. Phase 1 involves approximately ₹17,000 crore in capital expenditure for projects like a new zinc smelter and a tailings reprocessing plant. Diversification into tungsten, rare earth elements, and potash marks a new strategic direction.

Risks to watch

A key concern is the non-compliance regarding the adequate number of Independent Directors on the Board, pending government approval. Additionally, an administrative warning from SEBI over committee approvals needs close monitoring. Shareholders should watch the progress and execution of the ambitious 'HZL 2.0' projects and the resolution of governance matters.

Peer comparison

While specific peer financial data for FY26 is not immediately available, Hindustan Zinc's EBITDA margin of 54% and a 9% reduction in zinc production costs are industry-leading indicators. Its expansion plans and diversification into critical minerals set it apart from peers focused solely on traditional metal production.

Context metrics (time-bound)

• Mined Metal Production: Record 1,114 kt in FY26.
• Zinc Cost of Production (ex-royalty): US$ 959 per tonne in FY26 (9% lower YoY, 5-year low).
• Silver Price: Reached an all-time high of US$ 118.45 per troy ounce in January 2026.
• Interim Dividend: ₹10 per equity share approved and paid for FY26.

What to track next

Investors will be keen to observe the progress of the 'HZL 2.0' capacity expansion projects, including the Debari smelter and tailings plant timelines. The successful integration of critical mineral blocks and resolution of the board composition issue will also be crucial indicators.