Hind Zinc consol net profit jumps 56% YoY Apr-Jun, margin up 170 bps

21 Jul 2022

Hindustan Zinc Ltd’s recorded a significant growth in its bottomline in Apr-Jun, as compared to the year ago period, on the back of a sharp rise in revenue. The revenue grew mainly on account of higher realisation even as volume growth was moderate.

Sequentially, the earnings numbers reflected a muted performance with single-digit growth in revenue and profit.

The company’s consolidated net profit jumped 56% on the year to 30.9 bln rupees while the consolidated net sales were up sharply by 44% on the year to 93.9 bln rupees. Sequentially, the net profit was up by 5.5% and the net sales were up by 7%.

The jump in revenue was led by a 60% on-the-year rise in zinc sales to 68.7 bln rupees while lead sales rose 20% to 9.9 bln rupee and silver sales were flat at 11.1 bln rupees.

Sequentially, zinc sales recorded an increase of 7%, lead sales 5%, and silver sales 7%.

In volume terms, zinc sales grew by 10% on the year and declined 3% on the quarter to 206,000 tn. Lead sales were up by 10% on the year and 9% on the quarter to 54,000 tn.

A rise in input commodity prices reined in Hindustan Zinc’s operating margin growth.

The earnings before interest, tax, depreciation, and amortisation margin went up to 56.2% from 54.5% in the year ago quarter, but was lower than the previous quarter’s figure of 56.9%.

The company today announced that it will set up a fertilizer plant with an annual capacity of 500,000 tn through a new wholly-owned subsidiary.

Separately, the company will set up a new roaster plant with an annual capacity of 160,000 tn.

On the future outlook, the company said its capital expenditure in 2022-23 (Apr-Mar) will be $125 mln to $150 mln. It saw its zinc cost of output for the year at $1,125-1,175 per tn.