Hindustan Zinc reported its biggest quarterly profit ever, up 142% to ₹6,412 crore. Silver now accounts for nearly half of its earnings, which changes how investors should think about the business.
Hindustan Zinc Q2 results set records almost everywhere. The Vedanta group company’s net profit rose 142% to ₹6,412 crore in the July–September quarter, from ₹2,649 crore a year ago. Revenue from operations jumped 77% to ₹15,093 crore, from ₹8,549 crore.
Operating profit was even more striking. EBITDA rose 108% to ₹9,285 crore, with a 62% margin. In other words, Hindustan Zinc kept 62 paise of operating profit on every rupee of revenue, a level few industrial companies anywhere reach.
Production also hit records. Mined metal output rose 5% to 271,000 tonnes and refined metal rose 7% to 264,000 tonnes, both the highest ever for a quarter. Silver output jumped 20% to 173 tonnes.
The first half was just as strong. Revenue rose 77% to ₹28,840 crore and net profit rose 143% to ₹11,881 crore. Free cash flow before growth spending was ₹11,642 crore. Borrowings stood at just ₹6,171 crore.
Silver is the story?
The key figure is buried in the details: silver contributed about 45% of the company’s profitability in the first half.
Hindustan Zinc does not mine silver separately. Silver comes out of the same ore as zinc and lead, almost as a by-product. But with silver prices sharply higher this year, that by-product has become nearly as important as the main business. Silver in India trades around ₹2.12 lakh a kilogram, and every extra tonne of output is almost pure profit because the mining costs are already covered by zinc.
Lower costs helped as well. The company cut its zinc cost of production and benefited from better ore grades and higher prices for by-products.
The take
Investors have long valued Hindustan Zinc as a zinc producer with a silver bonus. That description no longer fits. With silver driving close to half the profit, the stock now behaves more like a silver play, and silver is far more volatile than zinc.
That cuts both ways. If silver stays high, Hindustan Zinc is producing cash at an extraordinary rate. The first half alone delivered a net profit equal to about 86% of the full FY26 profit of ₹13,832 crore. At this pace, FY27 profit could be well on its way to roughly ₹24,000 crore.
But silver can fall fast, as it did late last year after a sharp spike. A big part of this record quarter depends on a price Hindustan Zinc does not control.
Ownership adds another angle. The government has plans for a fresh offer for sale in Hindustan Zinc during FY27. Record profits and a strong share price give it a good window to sell, which could mean more shares coming into the market. Parent Vedanta, meanwhile, depends on dividends from Hindustan Zinc and has been spending heavily, including $600 million to double its zinc capacity in South Africa.
What next
Watch silver prices first, since they now move earnings more than zinc does. Next is the timing and size of any government stake sale. Investors will also look for a dividend announcement, given the company’s cash pile and Vedanta’s appetite for payouts, and for progress on the ₹5,000 crore capex plan for FY27.
About The Author
