# 1. Financial Performance ## A. Key Figures * **Quarterly Revenue:** **₹10,980 Cr** (record high, +28% QoQ, +27% YoY) · **9M Revenue:** **₹27,300 Cr** (record) * **Quarterly EBITDA:** **₹6,087 Cr** (record, +36% QoQ, +34% YoY) · **9M EBITDA:** **₹14,415 Cr** (record) * **EBITDA Margin:** **55%** (industry-leading) * **Quarterly PAT:** **₹3,916 Cr** (record, +48% QoQ, +46% YoY) · **9M PAT:** **₹8,799 Cr** (best-ever) * **Net Cash Position:** **₹329 Cr** (as of Dec ’25) vs. **₹2,547 Cr net debt** (Sep ’25) * **Free Cash Flow (pre-growth capex & RE):** **₹3,413 Cr** (quarter) · **₹7,225 Cr** (9M) ## B. Revenue Growth * **Record Top-Line Performance:** Revenue surged on the back of record output, favorable commodity prices, improved byproduct realization, and tailwinds from rupee depreciation. * **Sustained Momentum:** Nine-month revenue reflects consistent operational excellence and pricing advantages, reinforcing scale and market positioning. ## C. Profit Margins * **Margin Expansion to Record Levels:** EBITDA margin reached an industry-leading 55%, driven by operating leverage, cost optimization, and a **5-year low zinc COP of $940/ton** (ex-royalty). * **Strong Profit Conversion:** PAT growth outpaced revenue gains, highlighting efficient cost control and high incremental margin capture. ## D. Balance Sheet * **Rapid Deleveraging:** Transition from net debt to net cash position in one quarter underscores robust cash generation and disciplined financial management. * **Low Near-Term Maturity Risk:** Minimal debt due in Q4 (**₹1,300 Cr**) poses no strain on liquidity, supporting financial flexibility. ## E. Cash Flow * **Exceptional Cash Conversion:** High free cash flow generation (**₹3,413 Cr**) before growth capex highlights strong earnings quality and low sustaining capex needs. * **Capital Allocation Discipline:** Only **₹1,300 Cr** invested in capex (sustaining and growth), resulting in **₹3,400 Cr net cash accretion**, reinforcing self-funding capacity. --- # 2. Production & Output ## A. Key Figures * **Mined Metal Production:** **276,000 tons** Q3 (record since underground transition) · **799,000 tons** 9M (record) * **Refined Metal Output:** **270,000 tons** Q3 (highest ever) · **766,000 tons** 9M (second highest on record) * **Zinc COP (excl. royalty):** **$940/ton** Q3 (–10% YoY, –5% QoQ) · **$980/ton** 9M (5-year low) ## B. Mined Metal Volume * **Record Underground Output:** Q3 mined metal hit the highest level since the underground transition, supported by strong operational execution and volume ramp-up. ## C. Refined Metal Output * **All-Time High Refining Throughput:** Q3 refined metal output reached a record high, reflecting enhanced processing efficiency and sustained operational momentum. ## D. Cost of Production * **Sustained Cost Leadership:** Zinc cost of production hit a 5-year low, driven by **record volumes**, **higher domestic coal use (58%)**, **lower imported coal prices**, and **increased renewable energy share**. * **Cost Pressures & Offsets:** Despite **higher mine development costs** and **inflation in development rates**, power cost declines and operational efficiencies preserved margin gains. * **Forward Cost Guidance:** Management expects sustained zinc COP in the **$950–$1,000/ton** range, including in Q4, underpinned by structural improvements. * **Byproduct Impact:** COP **excluding byproduct credits** is **$100–$120/ton higher** than reported, though **brand fees (3% of revenue)** and **manufacturing expenses** added ~**$150/ton** YoY. ## E. Grade Trends * **Lower Q3 Grade, Higher Silver Focus:** Q3 ore grade declined to **3%** from 4% YoY, but 9M average held at 4%; Q4 grades expected to improve with selective processing to boost **silver output**. * **Increased Mine Development:** Development length rose to **15 km** (from 14 km), supporting future ore access despite near-term cost impact. --- # 3. Product & Segment Performance ## A. Key Figures * **Silver Production:** **158 tons** saleable (up 10% QoQ) · **451 tons** YTD (9 months) * **Silver Guidance:** **680 tons ±10 tons** FY target (472 tons accounted for: 451 produced + 21 in concentrate) * **Lead Market Share:** **>90%** domestic primary lead market ## B. Zinc & Lead Output * **Strategic Dual Production:** Pyrometallurgical plant operating in **lead plus zinc mode** due to favorable zinc prices and expected surplus MIC, with production to continue through April–May. * **Structural Output Linkage:** Zinc and lead are joint mining products, limiting operational flexibility; output ratios cannot be independently adjusted, making mode shifts strategic rather than tactical. * **Commissioning-Related Sales:** Low-grade lead concentrate from RD mill sold during commissioning due to smelter capacity constraints and unsuitability for processing. ## C. Silver Production * **Strong Silver Leverage:** Precious metals contribute **44% of profits**, creating significant earnings sensitivity to silver price movements. * **Output Expansion Underway:** Lead production set to double from **200 kt to 400 kt**, which will automatically boost silver output as a byproduct of lead smelting. * **Recovery Enhancements:** Graphite pre-float process commissioned at Agucha, improving silver recovery in milling—previously unavailable in early quarters. * **Fumer Utilization Rising:** Fumer operating at **60% capacity**, added **8 tons of silver** in 9 months, with Q4 improvement expected post-shutdowns. --- # 4. Capacity & Expansion ## A. Key Figures * **Refined Metal Capacity Additions:** **21,000 tpa** (debottlenecking) · **160,000 tpa roaster** commissioned at Debari * **Electrowinning Capacity Gain:** **25,000 tpa** additional annual capacity at Dariba and Chanderiya * **Growth Projects:** **250,000 tpa** integrated zinc smelter (Debari) · **Tailings reprocessing plant** (Rampura Agucha) * **Maintenance Capex:** **$90–100 Mn** (Q4) · **$400 Mn** (full-year) * **Silver Refining Capacity:** **800 tpa** (Pantnagar) with potential for **600–700 tpa** expansion ## B. Debottlenecking Gains * **Operational Uptime Enhanced:** Commissioning of the **160,000 tpa roaster** and successful debottlenecking drove higher plant availability and reliability. * **Scalable Output Growth:** Completed electrowinning upgrades unlocked **25,000 tpa** of incremental capacity without changing production mode. * **Silver Upside Pathway:** Ongoing lead facility debottlenecking could boost **future silver output** due to co-product linkage. ## C. Growth Projects * **Major Expansion Underway:** EPC finalized and groundwork initiated for **2x strategic projects**—integrated zinc smelter and tailings reprocessing—targeted for H2 completion. * **Execution Momentum:** Site prep and **regulatory clearance efforts** progressing for tailings plant; mine expansion focused on **RD and Zawar** as combined zinc-lead operations. * **Self-Funded Discipline:** Growth funded organically, supported by strong balance sheet and low production costs amid favorable commodity backdrop. ## D. Fleet Electrification * **Decarbonization Initiative Launched:** **10 electric bulker trucks** deployed at Debari in partnership with Enviiiro Wheels, with plans to scale to **40 vehicles**. ## E. Refinery Capacity * **Silver Refining Scalability:** Pantnagar refinery has **800 tpa** capacity with clear pathways for **600–700 tpa** expansion via augmentation or new facility. --- # 5. Commodity & Pricing ## A. Key Figures * **Zinc Price:** **$3,350/ton** (2023 high) · **$3,000–$3,200/ton** expected range (2026) * **Silver Price:** **~75% YoY surge** · **>$93/oz** peak in January * **Hedging (Q3 FY’26):** **47 kt zinc** · **55 tons silver** * **Hedging (FY’27):** **66 kt zinc** · **56 tons silver** at **$3,170/ton** and **$58/oz** ## B. Zinc Price Trends * **Supply-Driven Strength:** Zinc prices hit a multi-year high on **tight physical supply**, with near-term stability expected despite a potential 2026 surplus. * **Positive Price Trajectory:** Resilient demand and tightening supply underpin a well-founded bullish outlook, even amid geopolitical and growth volatility. ## C. Silver Price Surge * **Exceptional Momentum:** Silver prices surged on **critical minerals inclusion**, **relative undervaluation**, and **strong Indian festive demand**, though ongoing volatility limits predictability. * **Market Sensitivity:** Price movements remain highly reactive to geopolitical developments and global macro commentary, complicating forecasting. ## D. Premiums & Realization * **Integrated Premiums:** Metal premiums are embedded in net sales realizations and align with Indian market benchmarks, though not disclosed separately. * **Opportunistic Sales:** Lead concentrate was sold during the quarter to capture elevated silver prices and tight global conditions, boosting realization. ## E. Hedging Strategy * **Disciplined Execution:** Hedging follows a strict **10%–20% annual volume** policy, with no speculation—positions are locked in when prices exceed internal and consensus targets. * **Staggered Approach:** Hedges are deployed progressively (e.g., current cover for **April–October**), with remaining months to be decided based on market conditions. * **Dynamic Decision-Making:** No fixed price triggers; internal experts guide timing, leveraging input from **25 to 50 bankers** to assess favorable levels. --- # 6. Risks & Operational Safety ## A. Mining Fatality * **Tragic Incident:** Arun Misra expressed deep sorrow over the fatality of Kailash at the Rajpura Dariba mine, extending full support to the family. * **Safety Response:** Immediate corrective and preventive actions implemented post-incident, with organization-wide dissemination of learnings to reinforce protocols. * **Commitment Reinforced:** Despite the tragedy, safety remains a top priority, emphasizing the need for constant vigilance and cultural reinforcement. * **Global Recognition:** Hindustan Zinc ranked **#1 globally** in the S&P Global Corporate Sustainability Assessment 2025 for mining and metals—**third consecutive year**—with a score of **90/100**. --- # 7. Guidance & Outlook ## A. Key Figures * **Silver Production Guidance:** **680 ± 10 t** for FY '26 (expecting upper end) * **RE Power Mix:** **20%** current quarter · **25%** expected by end-FY · **35–40%** next year · **70%** in following year * **Cost Savings from RE:** **$20–25/t** · **INR 250–300 Cr annual savings** ## B. Volume Projections * **Stable Market Outlook:** Premiums and market behavior expected to remain consistent, supporting sustained volume momentum. * **Seasonal Strength Ahead:** Q4 anticipated as peak volume quarter, bolstered by bond price tailwinds and structural cost reductions. * **Positive Liquidity Trajectory:** Company on track to achieve a net cash position by end-March, underpinned by strong operational performance. ## C. Renewable Transition * **Strategic Decarbonization Push:** Expansion into energy transition metals aligns with global electrification and decarbonization trends, enhancing long-term resilience. * **Accelerating Green Energy Adoption:** RE ramp-up driven by wind and battery storage projects, with **70% renewable mix** targeted within two years. * **Material Cost Advantage:** Incremental RE adoption to deliver **significant cost savings**, improving unit economics and margin durability.