Hindustan Zinc to spend up to ₹5,000 crore on capex in FY27: CEO Arun Misra

Vedanta group firm Hindustan Zinc (HZL) plans to spend $500-600 million, or about ₹5,000 crore, on capital expenditure in the current financial year, with the bulk of the investment earmarked for ongoing projects, PTI reported, citing the company's Chief Executive Officer Arun Misra.

According to the PTI report, around 80% of the planned capex will be allocated to projects already under execution, while the remaining 20% will fund new projects that the company plans to announce shortly.

Misra told PTI that Hindustan Zinc has a total project pipeline of about 1 million tonnes of capacity, of which 250,000 tonnes have already been approved. The approved projects involve an investment of ₹12,000 crore across mining and mineralisation.

He said mining equipment orders have already been placed, and construction of the smelter has begun, while orders related to milling and concentrate facilities are yet to be finalised.

The remaining expansion to achieve the targeted capacity will require investments of a similar scale over the next four to five years, Misra said.

He estimated the annual capital expenditure during this period at around ₹7,000-8,000 crore, although only 15-20% of that multi-year outlay is expected to translate into cash outflows in the current financial year.

Misra did not disclose timelines or a detailed financial break-up for the proposed new projects.

Hindustan Zinc, a subsidiary of Vedanta, is India's largest integrated producer of zinc, lead and silver with 60.71% ownership held by Vedanta Ltd and 27.92% held by the Centre.

Hindustan Zinc Q1 Results

Hindustan Zinc reported better-than-expected earnings for the June quarter, driven by higher metal prices, increased volumes and lower production costs. Net profit more than doubled year-on-year to ₹5,469 crore, while revenue rose 77% to ₹13,747 crore, with both figures surpassing CNBC-TV18 poll estimates.

The company's Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) more than doubled to ₹8,050 crore from ₹3,859 crore a year ago, while EBITDA margin expanded to 58.6% from 49.7%.

Hindustan Zinc also reported its lowest-ever quarterly zinc cost of production at $851 per tonne, down 16% from a year earlier, reflecting improved operational efficiencies.

Shares of the company ended 0.5% higher at ₹533.65 on Friday. The stock has declined about 13% so far this year, while gaining close to 24% in the last 12 months.