As silver prices continue to rally, Hindustan Zinc is increasingly positioning precious metals at the heart of its growth strategy, even as it accelerates capacity expansion and long-term investments, company executives said during the miner’s third-quarter and nine-month earnings call.
The company reported sellable silver production of 158 tonnes in the December quarter, up 10 per cent sequentially, while nine-month silver output stood at 451 tonnes.
With silver now contributing 44 per cent of total profits, management reiterated its FY26 silver production guidance of around 680 tonnes (±10 tonnes) and signalled stronger output in the March quarter, which is typically the best period operationally.
Surging Silver Prices
The renewed emphasis on silver comes amid a sharp surge in prices. On Monday, silver futures hit fresh lifetime highs, with March contracts rising nearly 3 per cent to ₹3,18,729 per kg, while May and July contracts crossed ₹3,28,000 per kg and ₹3,35,000 per kg, respectively.
Market participants attributed the rally to tight physical supply, strong industrial demand and geopolitical tensions. Hindustan Zinc is the largest producer of silver in India, refining the metal at a minimum 99.9 per cent purity.
During the quarter, the company also monetised part of its inventory through the sale of lead concentrate, which it said was equivalent to 21 tonnes of silver, allowing it to capitalise on favourable market conditions.
Alongside silver, Hindustan Zinc is moving ahead with its next phase of expansion under its “2x” growth roadmap. It plans to step up growth capital expenditure in FY26, after spending about $180 million till December, with additional investments to be made as engineering contracts are finalised.
The expansion programme is anchored by a 250,000 tonnes per annum integrated zinc smelter at Debari and a tailings reprocessing plant at Rampura Agucha, both of which have entered the groundwork stage. The tailings project is expected to be completed by Q4 FY28, while the Debari smelter is slated for Q2 FY29, executives said on the call.
Operationally, the company reported record third-quarter mined metal production of 276,000 tonnes and refined metal production of 270,000 tonnes, aided by debottlenecking at its smelters and the commissioning of a 160,000 tonnes per annum roaster at Debari, which improved overall plant availability.
Zinc cost of production excluding royalty fell to a five-year low of $940 per tonne during the quarter.
Renewable Energy Savings
Executives also highlighted renewable energy as a medium-term cost lever. Renewable power currently accounts for about 20 per cent of electricity consumption and is expected to rise to 35–40 per cent next year, with management estimating annual savings of ₹250–300 crore from higher green power usage.
The company said the expansion push is being supported by a strengthening balance sheet. Hindustan Zinc ended December with a net cash position of ₹329 crore, compared with net debt of ₹2,547 crore at the end of September.
Over the first nine months of FY26, it generated ₹7,225 crore of free cash flow before capex and renewable energy investments, providing financial flexibility to fund growth.
Against this backdrop, Hindustan Zinc reported a standalone net profit of ₹3,879 crore for the October–December quarter of FY26, a 46.5 per cent year-on-year increase, while revenue from operations rose 27.5 per cent to ₹10,922 crore.
EBITDA increased 34.7 per cent to ₹6,055 crore, with margins expanding to 55 per cent, supported by higher metal production, stronger zinc and silver prices, and lower costs.