Hindustan Zinc Q3 Results: Profit Jumps 47% on Record Production

Introduction to Hindustan Zinc's Strong Quarter

Hindustan Zinc Ltd (HZL), a subsidiary of the Vedanta Group, announced a robust financial performance for the third quarter of fiscal year 2026, significantly surpassing market expectations. The company's success was underpinned by a combination of record production volumes, favorable commodity prices, and a notable reduction in operational costs, leading to its highest-ever quarterly revenue and profit.

Stellar Financial Performance in Q3

The company reported a standalone net profit of ₹3,879 crore for the quarter ending December 31, 2025. This represents a substantial 46.5% increase compared to the ₹2,647 crore profit recorded in the same period of the previous year. The reported profit comfortably exceeded the CNBC-TV18 poll estimate of ₹3,493 crore. Revenue from operations also saw a significant on-year rise of 27.5%, reaching ₹10,922 crore from ₹8,556 crore, surpassing the Street's estimate of ₹10,219 crore.

Operating Efficiency and Margin Expansion

Hindustan Zinc's operating performance was equally impressive. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) grew by 34.7% year-on-year to ₹6,055 crore, beating the analyst consensus of ₹5,614 crore. The EBITDA margin expanded to 55% from 52% a year ago. This improvement was largely attributed to a lower zinc cost of production and enhanced operating leverage, showcasing the company's ability to manage expenses effectively while scaling output.

Record Production Drives Growth

Operationally, the quarter was marked by several milestones. HZL achieved its highest-ever third-quarter mined metal production at 276 kilo tonnes and refined metal production of 270 kilo tonnes. The growth in output was a critical factor behind the record revenue figures. Furthermore, silver production increased by 10% sequentially, highlighting its growing importance to the company's bottom line. The silver segment contributed 44% to the company's profits during the quarter, benefiting from stronger prices.

Cost Management at a Five-Year Low

A key highlight of the quarter was the company's success in cost reduction. The zinc cost of production, excluding royalty, dropped to a five-year low of $140 per tonne. This represents a 10% year-on-year decrease and was achieved through lower power costs and higher realizations from by-products. This disciplined cost management played a crucial role in boosting profitability and expanding margins.

Key Financial Metrics for Q3 FY26

Market Reaction and Stock Performance

Investors responded positively to the strong earnings report. Following the announcement, Hindustan Zinc's shares extended their gains, trading over 4% higher on the National Stock Exchange at approximately ₹664 in afternoon trade. The stock has delivered a return of over 42% in the last year, significantly outperforming the NSE Nifty 50 index, which has risen by about 10% during the same period. This performance reflects strong investor confidence in the company's operational capabilities and financial health.

Analysis of the Results

The Q3 FY26 results underscore Hindustan Zinc's strong operational foundation and its ability to capitalize on favorable market conditions. The achievement of record output alongside a five-year low in production costs is a testament to the company's efficiency and strategic execution. The dual benefit of higher volumes and firm commodity prices for zinc and silver created a powerful tailwind for earnings. The significant contribution from the silver segment also highlights the company's successful diversification of its revenue streams within the non-ferrous metals space.

Conclusion

Hindustan Zinc has delivered an exceptional quarter, setting new records for revenue and profit. The performance was a result of a well-executed strategy focusing on maximizing production, controlling costs, and leveraging strong commodity prices. With its robust operational metrics and strong market position, the company is well-positioned to continue its growth trajectory. Investors will be watching to see if HZL can maintain this momentum in the coming quarters, navigating the dynamics of the global commodity markets.