Hindustan Zinc Ltd (HZL) today reported a 5 per cent growth in its net profit at Rs 2,285.26 crore for the quarter ended September 30, 2015 helped by volume growth and cost optimisation.
The Anil Agarwal-led firm had clocked a net profit of Rs 2,183.52 crore in the year-ago period, it said in a BSE filing.
Total income of the firm rose by 6 per cent to Rs 4,033.30 crore in the July-September quarter this fiscal from Rs 3,802.38 crore in the same quarter of 2014-15, it added.
Commenting on the performance, HZL Chairman Agnivesh Agarwal said in a statement: “We achieved one of our best results by resiliently adhering to our strategy of volume growth, operational efficiency and cost discipline.”
In anticipation, shares of the company today rose by 3.06 per cent to settle at Rs 158.40 apiece on the BSE. The results came after the close of market hours.
HZL said its revenues registered a growth on the back of significant increase in volumes and rupee depreciation even as LME (London Metal Exchange) prices and zinc premiums declined.
“Net profit increased by 5 per cent to Rs 2,285 crore during the quarter as compared to a year ago on account of higher operating profit and increase in investment income, partly offset by higher tax rate,” HZL added.
Mined metal production rose 13 per cent to 240 kilo tonne (KT) during the quarter compared to a year ago, primarily due to higher ore production across mines.
On production cost, HZL said zinc cost of production per tonne before royalty decreased by 8 per cent in rupee term and 15 per cent in US dollar term to Rs 50,236 (USD 771) as compared to Rs 54,732 (USD 903) a year ago.
“The decrease in cost was driven by higher volumes, reduced fuel prices and cost reduction initiatives, partly offset by regulatory levies and higher underground mine development,” it added.
HZL said as on September 30, 2015, its cash and cash equivalents stood at Rs 34,568 crore, out of which Rs 25,310 crore was invested in mutual funds, Rs 5,530 crore in bonds and Rs 3,505 crore in fixed deposits.
“The company follows a conservative investment policy and invests in high quality debt instruments,” it added.
Integrated zinc metal production during the the second quarter increased by 22 per cent y-o-y to 211 KT on account of enhanced smelter efficiency and conversion of WIP inventory.
Integrated saleable lead and silver metal production was the highest ever during the quarter, up 53 per cent y-o-y to 39 KT and up 64 per cent y-o-y to 110 tonne, respectively.
“This substantial increase was driven primarily by higher mined metal, smelter efficiency and better grades. Silver production also benefited from higher ore grade and volume from Sindesar Khurd mine,” HZL said.
The government of India holds 29.5 per cent stake in HZL, while rest is with Vedanta Ltd, earlier called Sesa Sterlite.