Hindustan Zinc’s FY26 ends with record profits and a lower cost curve

Hindustan Zinc closed FY26 with its strongest reported financial performance, helped by record volumes, sharp cost control, and a powerful move in silver prices. For 4Q FY26, consolidated revenue rose to INR 13,544 crore, EBITDA to INR 7,747 crore, and net profit to INR 5,033 crore. Full-year FY26 revenue was INR 40,844 crore, EBITDA INR 22,162 crore, and net profit INR 13,832 crore.

The quarter also stood out on costs. Zinc cost of production excluding royalty was $903 per tonne in 4Q FY26 and$959 per tonne for FY26, described as the lowest quarterly level since the underground transition and a five-year low for the full year.

What powered the quarter: volume, price, and cost working together

Operationally, the company reported its highest ever quarterly mined metal production at 315 kt and refined metal production at 282 kt. Full year mined metal production reached 1,114 kt and refined metal output was 1,048 kt.

On pricing, the presentation highlighted a supportive base metal environment during the quarter, while silver was the bigger tailwind. The company noted silver prices reached an all-time high during the quarter and showed materially higher averages year-on-year.

The financial mix shows the impact clearly: in the consolidated segment table, 4Q FY26 revenue included INR 6,997 crore from zinc, INR 1,153 crore from lead, INR 4,032 crore from silver, and INR 1,362 crore from others.

Revenue mix shows silver’s role in FY26

The company explicitly stated that precious metals contributed around 45% of overall profitability in FY26. While profitability splits are not the same as revenue splits, the reported revenue by metal provides context on how meaningful silver became in the topline as well.

For FY26, zinc contributed INR 23,771 crore, lead INR 3,901 crore, silver INR 9,841 crore, and others INR 3,331 crore to consolidated revenue.

A notable item discussed in the concall was the sale of lead concentrate. Management said 4Q FY26 included sale of 12,000 tonnes of lead concentrate, and the CFO quantified that this contributed around INR 500 crore of revenue and INR 330 crore of EBITDA during the quarter.

Growth projects: Debari expansion, tailings reprocessing, and value recovery

Beyond the quarter’s record earnings, Hindustan Zinc used the presentation to reinforce its multi-year expansion plan. The company disclosed a Board approved 250 ktpa integrated refined metal capacity expansion at Debari, with total approved investment of INR 12,000 crore and a target completion of 2Q FY29. The presentation also links this to mined metal capacity expansion across mines.

A second Board approved project is India’s first zinc tailings reprocessing plant at Rampura Agucha, with feed capacity of 10 Mtpa, approved investment of INR 3,823 crore, and a target completion of 4Q FY28. Management positioned this as a circular economy initiative converting waste streams into recoverable value.

The presentation also outlines a reserve-led growth effort. The company reported record ore resources and reserves of 468.6 Mnt and highlighted a structured exploration program with a stated target to increase metal reserves from 13.9 Mnt to 30 Mnt, primarily through the Zawar and Rajpura Dariba clusters.

In addition, two projects are expected to be completed by 2Q FY27: a hot acid leaching technology project at Dariba to recover silver and lead from jarosite, and a 510 ktpa fertilizer plant at Chanderiya. The hot acid leaching project is stated to have potential output of 27 TPA silver and 6 ktpa lead.

Guidance for FY27: steady growth with higher capex

The company provided explicit FY27 guidance in the presentation:

Production: mined metal 1,150 kt plus or minus 10, refined metal 1,100 kt plus or minus 10, saleable silver 680 tonnes plus or minus 10.

Zinc COP excluding royalty: $975 to$1,000 per tonne.

Growth capex: $500 to$600 million.

Management also discussed renewables in the concall. FY26 renewable energy share was highlighted as around 18%, and management indicated it expects to be in the 30% to 35% range in FY27.

Key risks and disclosures highlighted by management and auditors

The concall began with the CEO disclosing a fatal incident at the Zawar mines on January 25, 2026, involving a business partner employee due to a man-machine interaction. Management said the company is investigating and will strengthen protocols, and also referenced collision avoidance system deployment at Sindesar Khurd.

The audited results include an emphasis of matter note from the auditors referencing allegations made by a short seller against Vedanta group entities including Hindustan Zinc, and that information had been sought by regulators or authorities. Management stated it believes the allegations are baseless and that no adjustments were required in the financial statements.

On hedging, the CFO quantified the difference between hedge prices and market prices as a delta of about INR 1,100 crore in 4Q FY26 and about INR 1,500 crore for FY26.

Closing takeaways

Hindustan Zinc’s FY26 performance was driven by strong execution on volume, a very competitive cost structure, and a major uplift from silver pricing. The company paired that record year with a clearly stated project pipeline and timelines, while guiding FY27 for higher production and materially higher growth capex.

At the same time, the disclosures on safety, hedging impacts, and the continued backdrop of regulatory attention referenced in the audit report underline that investors will need to track execution quality and risk management as closely as they track metal prices.