Hindustan Zinc Q1 FY27: Profit up 145%, capex ₹5,000 cr

The headline numbers from Q1FY27

Hindustan Zinc (HZL), a Vedanta group company, reported stronger-than-expected earnings for the June quarter, helped by higher metal prices, improved volumes and lower production costs. Consolidated net profit for Q1FY27 rose 145% year-on-year to ₹5,469 crore, compared with ₹2,234 crore in the year-ago quarter. Revenue from operations increased 77% year-on-year to ₹13,747 crore from ₹7,771 crore. The company’s EBITDA rose 109% year-on-year to ₹8,074 crore, taking EBITDA margin to about 59% versus roughly 49.7% a year earlier. Total income for the quarter was reported at ₹14,063 crore, up 74% year-on-year. The quarter ended June 30, 2026.

FY27 capex plan: $100-600 million on ongoing projects

The company plans capital expenditure of $100-600 million in the current financial year, which it said is about ₹5,000 crore. PTI reported this capex guidance citing CEO Arun Misra. The bulk of the spend is intended for ongoing projects, as per the report. The capex guidance came alongside the earnings update, where management also highlighted operational and cost initiatives. Investors will likely track the pace of execution given the company’s strong cash generation in the quarter. The company did not provide a detailed project-wise split in the information shared in the excerpt.

What drove the earnings beat

HZL attributed the profit jump to higher metal prices and increased metal production. It also cited lead concentrate sale, higher by-product realisation and a stronger US dollar as contributing factors. Management described the quarter as being underpinned by record first-quarter mined metal production and a low zinc cost of production. The operating performance translated into a sharp improvement in margins, supported by both pricing and cost levers. CNBC-TV18 poll estimates were surpassed for both revenue and profit, according to the report referenced.

Costs: lowest quarterly zinc cost of production

The company reported its lowest-ever quarterly zinc cost of production at $151 per tonne, down 16% from a year earlier, reflecting operational efficiencies. On the earnings call transcript excerpt, HZL described the $151 per tonne figure as the lowest since its underground transition. The call also noted that power and fuel costs increased due to lower metallization of linkage coal and higher costs of imported coal. HZL also flagged challenges in the sale of lead concentrate due to inferior grade stock linked to the initial stabilisation of a new mill. Despite the power and fuel cost pressure, overall costs were helped by the lower zinc cost benchmark highlighted in its disclosures.

Production and volume trends

Operationally, HZL reported its highest-ever first-quarter mined metal production at 268,000 tonnes. The company described this as the fifth consecutive year of record first-quarter mined metal production. Refined metal production was 260,000 tonnes, up 4% year-on-year. Silver production stood at 149 tonnes, which management said contributed 46% to overall profitability. These production metrics were presented alongside the financial results in the earnings call material. The volume profile matters because HZL’s quarter was positioned as a combination of stronger realisations and higher volumes.

Segment performance: zinc, lead and silver

The zinc business remained the company’s largest contributor during the quarter. Zinc metal sales rose 48% year-on-year to ₹7,304 crore, while lead revenue increased 25% to ₹1,086 crore. In one results summary, profit from the zinc and lead segment was reported at ₹3,846 crore versus ₹1,733 crore in the corresponding quarter last year. Silver revenue jumped 169% year-on-year to ₹3,839 crore, while silver profit increased 170% to ₹3,327 crore. On a sequential basis, silver revenue declined 5% from ₹4,032 crore and profit slipped 2% as silver prices moderated from earlier highs, based on the figures provided.

Cash flow, balance sheet and dividend

the company reported free cash flow of ₹5,253 crore and a net cash position of ₹5,572 crore in the quarter, as per the earnings call excerpt. Separately, it disclosed gross investments and cash of ₹12,892 crore and total borrowings outstanding of ₹7,320 crore at the end of June 2026. During the quarter, HZL said it contributed around ₹6,450 crore to the national exchequer, including mining royalties. The company also announced a first interim dividend of $11 per share in the earnings call material. These data points are central to how investors evaluate capital returns and funding capacity for the planned FY27 capex.

Leadership changes and SEBI warning letter disclosure

In management updates, HZL’s board approved the appointment of Amarendu Prakash, former chairman and managing director of SAIL, as the new CEO and whole-time director with effect from August 1. The company also appointed Amit Gupta as chief financial officer, and the earnings call noted he had recently been appointed. In a separate exchange disclosure cited in the material, HZL said its board had taken note of a SEBI warning letter related to certain compliance matters and stated that corrective measures had already been implemented. These governance and leadership items were disclosed alongside the quarterly results.

Strategy notes: rare earth lease, renewables and hedging stance

HZL said it secured a mining lease for a rare earth elements and yttrium block in Gundulpet, Karnataka, as part of a diversification strategy. On the call, the timeline for production from this newly acquired block was projected around 2031-32, indicating a long lead time. The company increased renewable energy consumption to 22% and said it deployed India’s first 250 metric ton electric crane. It also noted inclusion in the Dow Jones Best-in-Class Emerging Markets Index for the first time. Management added that it has not conducted any new hedging activities in FY27 due to market volatility, while also flagging geopolitical uncertainties and evolving trade dynamics as risks.

Stock performance after results

Shares of Hindustan Zinc ended 0.5% higher at ₹533.65 on Friday, according to the market update in the provided text. Another market print in the material showed the scrip ending at ₹531.95 on the BSE, up 0.16%. The stock has declined about 13% so far this year, while gaining close to 24% over the last 12 months. The price action indicates a mixed near-term trend despite the strong quarterly numbers. Investors are likely to watch how metal prices and cost variables, especially power and fuel, evolve from here.

Key numbers at a glance

Conclusion

Hindustan Zinc’s Q1FY27 performance combined strong price realisations, higher production and a sharp improvement in operating costs, resulting in record quarterly profitability. Alongside results, the company reiterated a FY27 capex plan of $100-600 million (about ₹5,000 crore), announced leadership changes effective August 1, and disclosed a SEBI warning letter along with corrective actions. Management commentary also pointed to a higher power and fuel cost environment and the absence of new hedging due to volatility. The next key milestones for investors include updates on capex execution and operational performance in subsequent quarters, as well as the transition to the new CEO from August 1.