Hindustan Zinc Q3 Profit Soars 46% on Record Revenue

Introduction

Hindustan Zinc Ltd., a subsidiary of Vedanta Group, delivered a powerful performance in the third quarter of the financial year 2025-26, leading to a significant rally in its stock price. Shares of the zinc manufacturer surged 10% over three trading days after the company announced a record-breaking financial performance for the quarter ending December 31, 2025. The impressive results were fueled by favorable commodity prices, increased production volumes, and effective cost management, reinforcing the company's strong market position.

A Record-Breaking Quarter

Hindustan Zinc reported its highest-ever quarterly revenue and profit after tax (PAT) in Q3 FY26. The company's consolidated revenue stood at ₹10,980 crore, marking a substantial increase of 27% year-on-year (YoY) and 28% quarter-on-quarter (QoQ). This growth was primarily driven by a recovery in sales volume and strong prices for zinc and silver.

The company's net profit witnessed a remarkable 46% YoY jump, reaching ₹3,916 crore compared to ₹2,678 crore in the same period last year. On a sequential basis, the profit grew by 48%. Earnings before interest, taxes, depreciation, and amortization (EBITDA) came in at ₹6,087 crore, a 35% YoY increase, significantly surpassing analyst estimates.

Operational Efficiency and Margin Expansion

A key highlight of the quarter was the expansion of the company's EBITDA margin to 55.1%, up from 52.2% in the corresponding quarter of the previous year. This improvement was attributed to higher metal prices, increased by-product realisations, and a lower cost of production. The management noted that the company achieved its lowest quarterly zinc cost of production in five years, at $140 per tonne.

Sandeep Modi, the company's Chief Financial Officer, stated that the quarter marked a record performance reflecting operational excellence and strong fundamentals. The company also achieved its highest-ever third-quarter mined metal production, underscoring its robust operational capabilities.

The Strategic Role of Silver

The precious metals portfolio, particularly silver, played a crucial role in Hindustan Zinc's financial success. The contribution of silver to the company's earnings before interest and taxes (EBIT) rose to approximately 44% during the quarter. This segment provides significant earnings support and acts as a hedge against volatility in the base metals market. Revenue from the silver segment jumped significantly to ₹2,676 crore. The final quarter of 2025 saw a sharp rise in spot silver prices, which directly benefited the company's bottom line.

Q3 FY26 Financial Summary

Market Reaction and Analyst Views

The stellar quarterly report triggered a positive reaction from the market. Hindustan Zinc's stock price appreciated by 53% in the two months leading up to and following the announcement. After the results, the shares closed 3.74% higher at ₹661.2 per share on the BSE.

Brokerages responded with positive ratings. Kunal Kamble, an analyst at Bonanza, maintained a ‘Buy’ rating with a target price of ₹817 per share. Yes Securities issued an ‘Add’ rating with a target of ₹725, highlighting the company's operating leverage and the rising contribution from silver. The positive sentiment extended to the parent company, with BofA Securities upgrading Vedanta Ltd. to “Buy” and raising its target price by 75% to ₹840, citing a stronger outlook for aluminium and supportive silver prices.

Future Outlook and Guidance

Hindustan Zinc's management reiterated its production guidance for the full financial year 2026. The company expects to produce between 1,075 and 1,100 kilotonnes per annum (ktpa) of refined metal and achieve a silver output of around 680 tonnes. Looking ahead to the fourth quarter, the management anticipates improved silver volumes and further cost reductions, supported by higher usage of renewable energy and better ore grades. The company is also progressing on its expansion plans, including a 510 ktpa fertiliser plant expected to be completed in Q1 FY27.

Conclusion

Hindustan Zinc's performance in the third quarter of FY26 demonstrates its ability to capitalize on favorable market conditions through strong operational execution. The record-breaking revenue and profit, combined with disciplined cost control and a significant contribution from its silver business, have solidified investor confidence. With a clear production guidance and ongoing expansion projects, the company is well-positioned to maintain its growth trajectory in the coming quarters.