Hindustan Zinc Q2 Results: Vedanta unit cuts guidance for refined metal, saleable Silver

Hindustan Zinc Ltd., the subsidiary of Anil Agarwal-owned mining conglomerate Vedanta Ltd. now expects lower production for its refined metal and saleable steel for the full year. The company announced this as part of its September quarter results on Friday, October 17.

The company now sees Refined Metal production for the full year to be between 1,065 - 1,085 kt, down from the 1,090 - 1,110 kt projected earlier. Saleable Silver production is also seen at 670 - 690 mt, down from 700 to 710 mt earlier.

Net sales for the quarter increased by 3.5% from the same quarter last year to ₹8,550 crore.

Profitability for the period increased by 13.8% to ₹2,649 crore from ₹2,327 crore. The profitability was aided by a decline in total expenses for the company and finance costs.

Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the quarter increased by 8% from the year-ago period to ₹4,446 crore from ₹4,133 crore.

EBITDA margin for the quarter increased by nearly 200 basis points to 52% from 50.08% last year.

In its business update shared earlier, the company had reported a 6% year-on-year drop in saleable metal production. Refined zinc production increased by 2% from last year, while refined lead production fell by 29%. Silver production declined by 22% year-on-year. Hindustan Zinc is the only listed pure-play Silver-linked stock in India.

The company in its earnings release said that Silver is contributing 40% to its overall profitability and that it is well positioned to leverage commodity tailwinds.

Realisations will be higher for the company as zinc prices have risen 7% sequentially during the quarter, while Silver prices have increased by 17%.

Shares of Hindustan Zinc are currently trading 0.9% lower on Friday at ₹502.25. The stock has risen 10% in the last one month.