Hindustan Zinc Ltd — Q4 FY26

Hindustan Zinc Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=h7-1HBmPnsk Published: 2 weeks ago

0:00 Ladies and gentlemen, good day and welcome to the fourth quarter and full year FY26 earnings conference call 0:07 7 seconds hosted by Hindustan Zinc. As a reminder, all participant lines will be in the listenon only mode and there will be an opportunity for you to ask questions 0:15 15 seconds after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on 0:23 23 seconds your touchstone poll. I now hand the conference over to Miss Raksha Jan, director of investor relations of Hindustan Zinc. Thank you and over to you. 0:33 33 seconds Thank you operator and good evening ladies and gentlemen. Thank you for joining us today to discuss the fourth quarter and fulier FI26 results. In this 0:42 42 seconds call, we will refer to our investor presentation available on our company's website. Please note that today's entire discussion will be covered by the safe 0:50 50 seconds harbor cross mentioned on slide two of the presentation. Today we have Mr. Arun Misha our CEO and Mr. Pandit Modi our 0:58 58 seconds CFO. The management will be discussing the operational and financial updates for the quarter followed by a Q&A session. Now I would like to invite Mr. 1:07 1 minute, 7 seconds Arisha to present the results. Over to you sir. 1:10 1 minute, 10 seconds Thank you Ra. A very good evening to all of you. Thank you for joining us today. 1:15 1 minute, 15 seconds Before we begin, it is with deep sorrow that I share an unfortunate incident at our Jawer Mines on 25th of January 2026 1:24 1 minute, 24 seconds wherein we lost an employee of our business partner due to an unexpected man-made interaction. I extend my 1:31 1 minute, 31 seconds deepest condolences to the buried family and stand with them in this moment of profound grief. We have provided them 1:38 1 minute, 38 seconds our unwavering support during this difficult time. Such incidents are deeply distressing and reinforce the critical importance of fostering a 1:48 1 minute, 48 seconds strong safety first culture across our organization. Something we continuously strive to strengthen. Following a 1:55 1 minute, 55 seconds thorough investigation, we are committed to disseminating learnings across the organization while implementing corrective measures and strengthening 2:03 2 minutes, 3 seconds safety protocols to prevent such tragedies in future. As part of our efforts to prevent such interactions 2:10 2 minutes, 10 seconds through digitalization, we have launched a collision avoidance system at our Synindasur mine covering underground 2:17 2 minutes, 17 seconds equipment and personnel. We believe this initiative along with other safety interventions during this year will further strengthen our journey towards achieving our goal of zero. 2:28 2 minutes, 28 seconds This year we set a new milestone by crossing 1.1 million tons of mind metal while sustaining over 1 million ton of 2:36 2 minutes, 36 seconds refined metal production for the fourth consecutive year. This performance was further reinforced by record-breaking 2:43 2 minutes, 43 seconds fourth quarter with highest ever mind and refined metal production. We also achieved record one record resources and 2:51 2 minutes, 51 seconds reserves of 468.6 6 million tons with 25 years plus of mining life and recorded 2:58 2 minutes, 58 seconds highest ever metal reserves of around 14 million tons and highest ever silver reserve of 10.9,000 tons since 3:07 3 minutes, 7 seconds underground transition. On our journey to becoming a multimetal enterprise we have secured three critical mineral blocks potach tungsten and rare earths. 3:17 3 minutes, 17 seconds We have established clear timeline with work now underway. Further details are available on slide 11 of the 3:25 3 minutes, 25 seconds presentation. On sustainability front, I would like to share that Hindustan Zinc has been featured in the top 1% of the 3:32 3 minutes, 32 seconds S&P global sustainability yearbook for the ninth consecutive year, reflecting our strong commitment to sustainability 3:40 3 minutes, 40 seconds and ESG leadership. We remain focused on our 2030 goals with progress across key areas, 18% renewable energy consumption, 3:49 3 minutes, 49 seconds deployment of 180 LG and 52 electric vehicles, improved water management, 3:56 3 minutes, 56 seconds reduced waste to landfill and enhanced gender diversity. Further, I'm proud to share a landmark achievement. Our 4:04 4 minutes, 4 seconds Chandereya lead jinx mentor has become India's first site to receive the zinc mark and copper mark certification. A 4:12 4 minutes, 12 seconds testament to our commitment to responsible resource use, lower environmental impact and industry-leading standards. Our CSR 4:20 4 minutes, 20 seconds initiatives reached over 2.6 million lives across our 4,000 villages with Nanders in Rajasthan nearly doubling to 9,274. 4:31 4 minutes, 31 seconds We remain committed to inclusive growth through focused. 4:37 4 minutes, 37 seconds Moving to the market development, India continues to remain a standout among major economies with manufacturing PMI 4:46 4 minutes, 46 seconds sustaining strong momentum above 55 levels during the year. The country's GDP growth for FY 2027 is expected to 4:55 4 minutes, 55 seconds remain resilient at around 6.4 4 to 6.9% supported by continued government uh 5:03 5 minutes, 3 seconds capex infrastructure push and robust domestic consumption against a volatile global macroeconomic backdrop. Base 5:11 5 minutes, 11 seconds metal markets have remained relatively resilient during the quarter. Zinc prices touched a high of $3,487 5:19 5 minutes, 19 seconds per ton with an average of $3,241 per ton, while lead peaked at $2,40 per 5:27 5 minutes, 27 seconds ton, averaging at $1,931 per ton. This performance reflects tight 5:34 5 minutes, 34 seconds market conditions and steady demand from infrastructure, galvanization, and battery segments. Silver, however, 5:41 5 minutes, 41 seconds continues to stand out, maintaining strong momentum supported by robust industrial demand, particularly from solar and electronics, alongside 5:49 5 minutes, 49 seconds continued investor interest. While prices have normalized from peak levels, the medium-term outlook remains 5:56 5 minutes, 56 seconds constructive, driven by structural demand from energy transition and limited supply growth. Turning to 6:04 6 minutes, 4 seconds operational performance, we delivered a record-breaking quarter with mine metal production at 315 KT and refined metal 6:11 6 minutes, 11 seconds production of 282 KT. This led to historic fullear performance with mine metal at 1.1 million tons and second highest refined metal of 148 kiloton. 6:24 6 minutes, 24 seconds The growth was driven by higher or production and improved mind metal grades. On the refined metal side, 6:31 6 minutes, 31 seconds output was supported by debottleing at Chandereya and Dariba. Improved plant utilization and enhanced operational 6:38 6 minutes, 38 seconds efficiencies resulting in higher throughput and better asset performance. 6:43 6 minutes, 43 seconds On the cost front, despite a volatile geopolitical environment, we achieved the lowest quarterly zinc cost of 6:50 6 minutes, 50 seconds production excluding reality since underground transition at $93 per ton, reflecting a decline of 9% yearon-year 6:59 6 minutes, 59 seconds and 4% quarteron quarter. The reduction was driven by a combination of factors. 7:05 7 minutes, 5 seconds Lower power cost, improved byproduct realization, and operating leverage benefits from increased volumes. On a 7:12 7 minutes, 12 seconds fullear basis, we delivered a 5year low cost of production at $959 per ton, well below our guidance of $1,000 per ton. 7:21 7 minutes, 21 seconds This underscores the structural strength of our cost base and reinforces our position on the global cost curve. Our 7:29 7 minutes, 29 seconds quarterly silver production stood at 176 tons up 11% sequentially. For the full year, silver production stood at 627 7:37 7 minutes, 37 seconds tons. Impacted by change in mining sequence supported by strong silver prices, our precious metal portfolio 7:44 7 minutes, 44 seconds achieved a milestone performance contributing 45% to the overall profitability profitability. Further to 7:52 7 minutes, 52 seconds capitalize on the favorable price environment and optimize inventory, we strategically sold 12,000 tons of lead 7:59 7 minutes, 59 seconds concentrate during the quarter including similar actions in the previous quarter. 8:06 8 minutes, 6 seconds Total silver equivalent sales amounted to 37 tons effectively enhancing overall silver contribution towards the 8:13 8 minutes, 13 seconds financial performance. This combination of lowest cost of production, strong output and commodity tailwinds 8:21 8 minutes, 21 seconds translated into all-time high financial performance both the quarter and full year. During the quarter, we delivered 8:27 8 minutes, 27 seconds record revenue of 13,544 crores, highest ever AITA of rups 7,747 8:34 8 minutes, 34 seconds cr and record net profit of 5,33 cringing a new milestone for the company. On the growth projects front, 8:42 8 minutes, 42 seconds we are making steady progress for the 250,000 tons peranom integrated zinc smelter at Neari. Site mobilization is 8:50 8 minutes, 50 seconds complete and detailed engineering is largely finalized at Rampur Agucha. Site work for the tailings reprocessing plant 8:57 8 minutes, 57 seconds has commenced with engineering completed. In parallel, we are accelerating exploration for our 2X 9:05 9 minutes, 5 seconds growth plans with partners onboarded at Jawar and Raspura River. On technology-led initiatives, we are 9:12 9 minutes, 12 seconds advancing the hot acid leeching process to unlock additional value for smelting waste through recovery of additional 9:19 9 minutes, 19 seconds lead and silver. Given its complexity as a first of its kind project in India, commissioning is now expected in quarter 9:26 9 minutes, 26 seconds 2 of FY27. The fertilizer project is also on track for commissioning in early quarter 2 FY27. 9:35 9 minutes, 35 seconds Looking into the year ahead with a well structured capex road map in place we are confident in sustaining this strong 9:42 9 minutes, 42 seconds performance in the year ahead with an expected mind metal production of 1,150 9:48 9 minutes, 48 seconds ktpa plus or minus 10 k and a refined metal production of 1,100 ktpa plus or 9:56 9 minutes, 56 seconds minus 10 k with an expected refined silver production of 680 tons plus or minus 10 tons. 10:05 10 minutes, 5 seconds Hindustan Zinc is entering a defining phase of its growth anchored in scale cost leadership and a 10:12 10 minutes, 12 seconds relentless focus on excellence. With a strong balance sheet and a clear strategic road map, we are poised to 10:19 10 minutes, 19 seconds invest decisively expand our resource base and unlock new avenues of growth. 10:25 10 minutes, 25 seconds As the world accelerates towards electrification, decarbonization and energy security, we see a general 10:33 10 minutes, 33 seconds generational opportunity for metals. Our ambition is not only to participate in this transformation but to lead it by 10:40 10 minutes, 40 seconds building future ready capabilities, advancing sustainability and delivering consistent long-term value. With this, I 10:48 10 minutes, 48 seconds now hand over to Sundep for an update on the financial performance. 10:52 10 minutes, 52 seconds Thank you Mr. Mishra and a good evening everyone. The global macro environment continues to be marked by uneven growth and geopolitical volatility. In 11:01 11 minutes, 1 second contrast, India remains relatively resilient with FI26 GDP growth estimated at around 7.6% 11:08 11 minutes, 8 seconds moderating to 6.4 to 6.9% in FI27 supported by strong domestic demand, infrastructure led capex and political continuity. 11:18 11 minutes, 18 seconds Commodity markets remain sensitive in the near term. However, underlying metal fundamentals are increasingly constructive with energy transition 11:26 11 minutes, 26 seconds accelerating zinc and silver demand structurally. While zinc demand remains stable supported by galvanization, lead 11:33 11 minutes, 33 seconds continues to witness steady battery driven demand and silver stand out structurally with strong demand from solar and electronics driving a 11:42 11 minutes, 42 seconds sustained deficit. These fundamentals provide support to current price levels. 11:47 11 minutes, 47 seconds Against this backdrop, our focus on cost leadership, operational excellence and balance sheet strengthens position us well for sustained value creation. 11:56 11 minutes, 56 seconds Turning to the performance, both the quarter and the full year mark milestone achievements. For the first time, we have crossed 40,000 cr in the revenue and 20,000 cr in AITA for the full year. 12:07 12 minutes, 7 seconds This year's record volume and lower our cost undermining our margin resilience showcasing our structural cost leadership, silver le profitability 12:16 12 minutes, 16 seconds upside and discipline growth capex which position us well for sustained value creations across cycles. In Q4 FI26, we 12:24 12 minutes, 24 seconds delivered our highest ever quarterly revenue of 13,544 crores, up 49% YI and 23% quarter on 12:32 12 minutes, 32 seconds quarter driven by higher production, a supportive commodity environment, improved byproduct realization and rupee depreciation. Quarterly, AITA stood at 12:40 12 minutes, 40 seconds record 7,747 cr up 61% Y and 27% quarteron quarter with industryleading AITA margin of 57%. 12:50 12 minutes, 50 seconds This performance was supported by higher revenue and the lowest ever quarterly zinc cost of production since underground transition 12:58 12 minutes, 58 seconds at $900 three per ton. Key drivers included higher domestic coal uses at 64% soften coal prices of imported one, 13:08 13 minutes, 8 seconds higher production and strong byproduct realization along with the better mine rates. Reflecting the strong operating performance, we delivered our highest 13:17 13 minutes, 17 seconds level quarterly net profit of 5,33 cr up 68% y and 29% quarteron quarter. For the 13:24 13 minutes, 24 seconds full year we achieved record revenue of 40,000,844 cr a bit of 22,162 13:32 13 minutes, 32 seconds cr and a net profit of 13,832 cr cost of production for the fi26 stood at $1959 13:40 13 minutes, 40 seconds per ton the lowest in last 5 years and very below our guided range free cash flow before growth capex and renewable 13:46 13 minutes, 46 seconds investment for the year was 13,337 cr for fi27 we have guided z cost of 13:53 13 minutes, 53 seconds production excluding royalty at dollar 975 to,000 per ton reflecting prevailing global uncertaintities. Planned capital 14:02 14 minutes, 2 seconds expenditure for FI27 is in the range of $500 to $600 million toward announced growth projects. Our strong gener cash 14:10 14 minutes, 10 seconds cash generation enabled us to close the year with a net cash position of 5594 cr as of March 26 compared to a net 14:19 14 minutes, 19 seconds position of 1169 cr at the close of the last year. Our gross cash position is around 14 14,000 cr as at March 26. 14:29 14 minutes, 29 seconds During FI26, we also contributed around 19,000 cr to national extractor including more than 6,000 cr to the 14:36 14 minutes, 36 seconds state of Rajasthan underscoring our role as a significant contributor to the economy and the state. We also made meaningful progress in long-term value 14:45 14 minutes, 45 seconds creation. During the year, Hindustan League was included in the Nifty 100, Nifty next 50 and multiple Nifty ESG indexes. We now rank among the top five 14:54 14 minutes, 54 seconds Nifty metal companies are among the top companies in the Nifty 100. Our market capitalization stood at approximately 2 lakh 12,000 cr at the end of March 26 15:03 15 minutes, 3 seconds and we touched a peak market cap of 3 10,000 cr during the year. Overall Q4 reflects the strength of our business 15:10 15 minutes, 10 seconds model and execution while FI26 marks a milestone year setting new benchmark across financial and operational matrices backed by technology innovation 15:19 15 minutes, 19 seconds and strong sustainability framework. We remain well aligned with India's growth and energy transition priorities and are confident of delivering resilient growth 15:27 15 minutes, 27 seconds and long-term value for all stakeholders. With this, I will now hand over to the operator for the Q&A session. Thank you. 15:34 15 minutes, 34 seconds Thank you very much sir. We will now begin the question and answer session. 15:39 15 minutes, 39 seconds Anyone who wishes to ask a question may press star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you 15:47 15 minutes, 47 seconds may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will 15:54 15 minutes, 54 seconds wait for a moment while the question queue assembles. 15:59 15 minutes, 59 seconds We'll take our first question from the line of Mano Gogia from Yes Security Securities India Limited. Please go ahead. 16:08 16 minutes, 8 seconds Yeah. Hello. Am I audible? Yes, Mano. Please go ahead. 16:12 16 minutes, 12 seconds Yes. Uh very good evening and thank you for the opportunity. So first of all congratulations on the good set of numbers. Uh my first question comes 16:21 16 minutes, 21 seconds around what you know would it be possible for you to give me what the health quantity across zinc and silver would be for both Q127 and the whole 16:29 16 minutes, 29 seconds year of FI27 for the Q1 for the zinc is held at 20 KT 16:37 16 minutes, 37 seconds spread between the April to June at a average price of $3,100 and silver is 25 ton at a average price of $57 for the 16:46 16 minutes, 46 seconds full year FI271 1 KT is hazed at an average price of $3,225 per ton and silver is hazed at 59 tons at an average price of $50 per triumph. 17:02 17 minutes, 2 seconds Oh, okay. Okay, got it. And uh just you know uh countering on this uh I mean for silver you know the presentation states 17:09 17 minutes, 9 seconds that we plan to take the capacities up to 830 KT uh sorry 830 tons by 2029 and 17:16 17 minutes, 16 seconds uh this year the run rate has been roughly 620 to 630. So how should we see the runway from here onwards? Could you give you give us some brief about that? 17:27 17 minutes, 27 seconds No m this will also come along with the expansion of immediately 250 K smelter that we are adding right so when that 17:36 17 minutes, 36 seconds 250 KTPS smelter gets added so that will come to about 1.1 +.1 1.35 1.4 4 million 17:46 17 minutes, 46 seconds ton of metal and for that the mic would be about 1.5 1.55 million t of mic automatically that gives additional lead 17:55 17 minutes, 55 seconds which will focus that is number one number two we are commissioning the LGC circuit which will produce additional silver we'll be having the new smelter 18:04 18 minutes, 4 seconds along with its own fumer that will also add the silver plus by that time some amount of telling recycling will also 18:10 18 minutes, 10 seconds come back altogether if you look it will be crossing 800 tons the silver by that time. 18:17 18 minutes, 17 seconds Oh okay. Um but I mean uh you know during Q4 we did round about 176 tons for silver. So would it be you know safe 18:27 18 minutes, 27 seconds to assume that we can maintain this run rate going ahead in Q1 Q2 and you know for the remaining part of FI27 then 18:35 18 minutes, 35 seconds so as of now our guidance wise we have given 680 tons for the entire year right so you'll follow the similar pattern only 680 tons and if you consider last 18:44 18 minutes, 44 seconds year we did the MIC sale in which 37 tons of silver equivalent was there that 37 if you add to 627 we have already at 18:53 18 minutes, 53 seconds 66 64 level right compared to that we have only given a guidance of 680 we have got MIT in our hand and if and if 19:02 19 minutes, 2 seconds the lead metal prices fall while zinc prices are up which happened last year then we'll tilt our production towards 19:09 19 minutes, 9 seconds more of zinc less of lead and we will sell the lead mic which is made surplus this way and then uh produce silver 19:17 19 minutes, 17 seconds whatever is possible through the zinc maximization route at the same time recover silver through to let the MIT set. 19:27 19 minutes, 27 seconds Oh, okay. Okay. No, that is helpful. Um, so my second question comes, you know, there's a 35% sequential jump in other person other expenses. 19:37 19 minutes, 37 seconds What were the key reasons behind the same so I will address this HDL has so you will see the similar jump in other 19:45 19 minutes, 45 seconds operating income as well. Okay. So I will address the both parts. Aged has so agile has entered into the various agreement with the we have set up the 19:53 19 minutes, 53 seconds various ancillary business. So the ancillary business are basically with the third party where we provide them smelters residue which they convert from 20:02 20 minutes, 2 seconds waste to wealth. So as per this arrange arrangement agent sells the smelter residue which is like a PF cake which 20:09 20 minutes, 9 seconds contains the zinc and cadmium and then after that it is also purchase the back the finished goods or the wip which then 20:18 20 minutes, 18 seconds used by Hindustan zinc in the other is smelting processes or mining processes. 20:22 20 minutes, 22 seconds So that's why as per the accounting the charges accounted when the sale happen and the other operating income and when the purchase happen it is a part of the 20:30 20 minutes, 30 seconds other expenditures and the amount is 600 cr both sides. 20:36 20 minutes, 36 seconds Oh pardon I could not get the number of what was the amount we see on the around 600 cr both side other operating income 20:44 20 minutes, 44 seconds as well as other expenditure for the full year. Okay. Okay. Okay. And uh do we expect to continue this trend 20:52 20 minutes, 52 seconds going forward then? I mean the agreement. 20:55 20 minutes, 55 seconds Yeah. Yeah. This trend will continue to increase and you will see the 600 cr going up to maybe 1 1200 to,500 K annually in both side other operating income and other expenditures. 21:07 21 minutes, 7 seconds Oh okay. Okay. Got it. Sure. I mean uh I have more questions. I'll join back to K. Thank you so much. Thank you. 21:15 21 minutes, 15 seconds Thank you. 21:17 21 minutes, 17 seconds Next question is from the line of Pala Agarwal from Antique Stock Broking. Please go ahead. 21:22 21 minutes, 22 seconds Yeah, good evening sir. Congratulations on a good set of numbers. Uh you so first question was on the coop. So uh you know the quarter for cost was pretty 21:31 21 minutes, 31 seconds low at $900 per ton. Uh but for the full year they giving a guidance of about $975 to $1,000. 21:39 21 minutes, 39 seconds So will there be such a you know steep increase or will we see $975 in Q1 or that will be more towards the second 21:46 21 minutes, 46 seconds half of the year. So Pal I will address here. So see the cost of Q4 has been a significant benefit coming on account of 21:55 21 minutes, 55 seconds the mining grade. So we had a mining grade of 7.9% in the Q4 and compared to the fullear average of around 7.5%. And as I 22:04 22 minutes, 4 seconds explained one 10 bits of the mining grade impacts the $7. So I think Q1 historically we have been around 7.3 22:10 22 minutes, 10 seconds 7.4%. That should be there. Of course we don't give guidance quarter wise. At the same time secondly uh the current 22:18 22 minutes, 18 seconds geopolitical environment where you see the input cost commodity coming impact of the diesel propane case chemical explosive. So I think we need to factor 22:27 22 minutes, 27 seconds those also on a year basis. So maybe uh we don't know about the what certain uh uncertaintities but we have factored 22:34 22 minutes, 34 seconds certain portion of it. Uh that put together I think $975 to $1,000 is good enough. I'm sure we should be able to do 22:42 22 minutes, 42 seconds much below then as the situation improves. 22:46 22 minutes, 46 seconds Sure sir. And also have we seen any impact I mean of this shortage of natural gas has it impacted our production in any aspect or led to 22:55 22 minutes, 55 seconds higher cost in Q4? It is a marginally higher cost in the Q4 maybe around $11 per ton but on the production point of view no impact. 23:04 23 minutes, 4 seconds Sure sir and lastly if you could just give me you know the uh proportion of consumption 26 and you know how much will that increase in 27. 23:12 23 minutes, 12 seconds So FI26 we close for the full year around 18% renewable energy and for a full year in FI27 we should be between 30 to 35%. 23:24 23 minutes, 24 seconds Sure sir. Okay. Thank you. I'll join the C. 23:27 23 minutes, 27 seconds Thank you. Next question is from the line of Ashish Krial from Noama Wealth Management. Please go ahead. 23:34 23 minutes, 34 seconds Yeah. Hi, good evening everyone. Thank you for the opportunity and again many congratulations. Uh so two things from my side. uh one uh obviously uh the cost 23:43 23 minutes, 43 seconds of production which we have seen sharp fall uh the byproduct credits could have helped a big way because we are seeing 23:50 23 minutes, 50 seconds in a top line also uh revenue of others increase from 783 cr to 1362 cr in this quarter for fourth quarter. So my only 23:59 23 minutes, 59 seconds question is you know how much it one can contribute or work to the higher sulfuric acid prices or the benefits of that in terms of our cost of production. 24:11 24 minutes, 11 seconds So Ashi sulfuric acid prices are basically a division of consumation of many things. One is the government also have their own control for the 24:19 24 minutes, 19 seconds fertilizer. Second are linked with the sulfur index. So by and large you can consider depending upon the sulfur index 24:26 24 minutes, 26 seconds the prices would be. So the way input commodity prices are moving similar way the this prices are also moving. So I 24:35 24 minutes, 35 seconds think whatever we have seen in Q4 and we have seen the stable thing in the April as well. So I think whatever we have 24:42 24 minutes, 42 seconds seen in the March should continue until the this situation is there for the input commodity. So that is more like offsetting for us. So if the input 24:51 24 minutes, 51 seconds commodity increases this prices increases and then we get offsets. So uh so in this 24:59 24 minutes, 59 seconds I just wanted to add look at it positively in the guidance when we move from,48 KT metal to 1100 KT metal that 25:07 25 minutes, 7 seconds means much more acid more residues will be available to us. So this is effort is sustainable and going forward the 25:14 25 minutes, 14 seconds volumes are only increasing. So this other income going up and up every year unless the prices crash we see a good 25:21 25 minutes, 21 seconds good prospect of you know sustaining this kind of an earning. 25:25 25 minutes, 25 seconds Yeah. Yeah. I agree sir that's the reason I was asking you know uh you know in terms of in a certain basis or something if you can guide you know how 25:33 25 minutes, 33 seconds much it could be which can be sust uh uh in sustainable in nature. 25:39 25 minutes, 39 seconds Yeah I think we should leave it to the index. uh I don't think we can quantify on the only you can make a guess that quantities of material will keep on 25:46 25 minutes, 46 seconds increasing along with the increase in more mind metal and more metal. 25:52 25 minutes, 52 seconds Okay. Uh second question is on account of uh the next phase of expansion. Uh we earlier said that you know in the first phase we are increasing capacity by 26:01 26 minutes, 1 second 250,000 tons and obviously you have been uh giving us updates uh each quarter but uh what is missing is the second phase 26:08 26 minutes, 8 seconds which we discussed also when you announced that you are saying that you know you know next six months we will come out with the next phase of 26:14 26 minutes, 14 seconds expansion plan also. So where we are or do we think that know first we'll complete this and then only we'll start or how to take it forward? 26:23 26 minutes, 23 seconds No no no no we are absolutely on the on the job. See the change which has happened is earlier we were thinking we'll make two or three different 26:31 26 minutes, 31 seconds smelters in different locations. Then we had an idea instead of doing that why not bring everything together in one 26:38 26 minutes, 38 seconds place. Then we reworked the whole plan and now the designers have confirmed that in one location about 600 700 KTPS 26:48 26 minutes, 48 seconds smelter can be put. We plan to do that where we are putting the 250 KTPS melter. That means in one location 1 millionth smelter will come up. So that 26:56 26 minutes, 56 seconds design has been finalized. Uh now the commercial process is going on. I see that another 1 month's time we should be able to place the order. And now in last 27:05 27 minutes, 5 seconds two months we are focusing on the mill portion because we have already placed order for mining. Now the mills have to be expanded. I think mills order will 27:13 27 minutes, 13 seconds also close sometime between the first week of June or second week of June. So although we wanted to clear out all the 27:20 27 minutes, 20 seconds orders by January of this year but slightly late but it is worth it because putting everything together in one place 27:27 27 minutes, 27 seconds will reduce the cost of the project also. 27:30 27 minutes, 30 seconds And where they are putting sir Rajasthan only or somewhere else? 27:33 27 minutes, 33 seconds Rajasthan. Rajasthan. all Rajasthan only and we want to bring it in the similar distances because we don't want to carry concentrate on far distances. 27:41 27 minutes, 41 seconds Understood and sir lastly obviously when we are very much keen on putting up this kind of smelter or capex 27:48 27 minutes, 48 seconds I'm sure that we have been given a sense from the government about the mines which is going to be renewed or expired 27:57 27 minutes, 57 seconds in 2013. So we are very much comfortable on that. That's right. No, we are comfortable because we have the first 28:04 28 minutes, 4 seconds right of refusal. So in any case, we it's only a matter of how much premium we ready to pay but uh just by bidding and people cannot take it away. 28:14 28 minutes, 14 seconds Okay. Okay. Thank you sir and all the best. Thank you. 28:17 28 minutes, 17 seconds Thank you. Next question is from the line of Pinakin from HSBC. Please go ahead. 28:24 28 minutes, 24 seconds Yeah, thank you very much. So my first question on the silver production guidance uh it looks a bit underwhelming. Uh so just trying to understand that when can we see silver 28:33 28 minutes, 33 seconds production spike up sharply you know 700 725 state uh expect production to remain in this range 67 680 for the next three years only. 28:43 28 minutes, 43 seconds I will give you the clue that can happen when the zinc prices fall to say 2800 to $3,000 per ton. If the zinc prices fall 28:51 28 minutes, 51 seconds then and silver remains at say $60 at Rion, it will make much sense to produce more lead and silver than production of 28:59 28 minutes, 59 seconds zinc. And when we do that, then we'll surely see the numbers going up to 700 tons plus. 29:06 29 minutes, 6 seconds Okay. So just trying to understand that as a company we cannot have higher silver prices and higher silver production. Uh they are mutually 29:14 29 minutes, 14 seconds exclusive. Uh no it's it's see ultimately our minds we we our grades which we are proud of and which 29:21 29 minutes, 21 seconds determines the cost is the grade of zinc. So it's a more zinc zinc rich or and when the zinc LM is so good say 29:30 29 minutes, 30 seconds 3,100 200 on an average or picking up to 3,400 if you put the volumes it is better than producing 30 tons additional 29:39 29 minutes, 39 seconds silver if I put 30,000 tons of additional zinc it brings me more money. 29:46 29 minutes, 46 seconds Got it. My second question is uh on the uh dividend payouts. It's a bit um surprising that you know the uh the quarter has just started and we have 29:54 29 minutes, 54 seconds declared an X27 dividend. U so what is the thought process behind this and also the uh brand fee/ royalty fee uh fee uh 30:03 30 minutes, 3 seconds have has that been paid out to the parent for this year and were there any changes over there? 30:09 30 minutes, 9 seconds So just one thing I will correct you that we don't have anything called royalty fee. It is brand and strategic services fee. So I think let's let's 30:17 30 minutes, 17 seconds keep it we should use the right brand license and restrictive services fee. Uh I will first come to the dividend. I 30:25 30 minutes, 25 seconds think last year also Q1 in the June month we declared the company declared the board approved the dividend for the FI26 30:32 30 minutes, 32 seconds as a first in dividend and I think dividend is not dependent upon the this year profit dividend is out of the earnings which company has. So we have 30:40 30 minutes, 40 seconds almost 22,000 K worth of the retain earning and out of that board has approved the first instinct dividend of 11 rupee which is around 4,300 K rupees. 30:50 30 minutes, 50 seconds So I think that should be and as far the brand fee license and static services fees is concerned that has been paid as 30:58 30 minutes, 58 seconds per the contract entered into the with vanta limited for this year. So what would be that amount behind? 31:06 31 minutes, 6 seconds This year is around 1,300 K and FI27 and what was this in FI26 kind of amount,000. 31:23 31 minutes, 23 seconds Understood. Thank you very much. 31:26 31 minutes, 26 seconds Thank you. Next question is from Sumangal Natia from Kotak Securities. Please go ahead. 31:33 31 minutes, 33 seconds Uh yeah, thank you for the chance. Uh sir, my just continuing on the previous question. Just want to know uh uh the 31:40 31 minutes, 40 seconds contract for the brand fee uh when it is due for revision in terms of uh the percentage uh uh share. 31:48 31 minutes, 48 seconds So brands and royalty and services fee contract is valid till 2030. So in between there is no renewal is there. 31:56 31 minutes, 56 seconds It's a valid till 2030. 31:58 31 minutes, 58 seconds And the payout happens for the full year based on some estimate at the uh in the first quarter. Is that right? Yes. Yes. 32:05 32 minutes, 5 seconds But it's settled at the end at the end of the year based the annual account. So like for FI26 after the annual accounts audit, we have to pay 100 cring to FI26. 32:18 32 minutes, 18 seconds Okay. Okay. Understand. So my second question is on dividend. So FI26 if we see we've paid some 21 rupees which is a 32:26 32 minutes, 26 seconds decline versus last year whereas profitability has gone up much more. So generally going forward given uh the massive payment on earnings given the 32:34 32 minutes, 34 seconds commodity prices what should we expect should I mean is there now a plan to uh uh pile on cash given the upcoming capex 32:42 32 minutes, 42 seconds or should we expect a high payout to continue? So we will continue to I think the board will uh continue to balance 32:49 32 minutes, 49 seconds between paying dividend and investing for the expansion. So that balance will continue and I don't think it is one or 32:56 32 minutes, 56 seconds the other. Both will continue because when we declare the expansion the question put to me was will we be in a position to pay dividend. Now our 33:05 33 minutes, 5 seconds operations are proving that we are able to maintain both that we are able to pay dividend as well as we are continuing to expand by investing in our assets. 33:15 33 minutes, 15 seconds Okay. But uh conceptually so cash flows will be used for dividend and uh growth. 33:21 33 minutes, 21 seconds We would not be using debt uh for our growth expansion. Ideally no but cash timeline you know mismatch or if I get 33:30 33 minutes, 30 seconds better earning by my own investment rather than and loan is much cheaper because of our our uh balance sheet 33:39 33 minutes, 39 seconds strength then we would take those calls but primarily we are earning enough to fund our growth that is for sure. 33:46 33 minutes, 46 seconds Understood. Understood. The second question is on the hedging strategy given the volatility in the prices both for silver and to some extent zinc as 33:55 33 minutes, 55 seconds well. Broadly what should we expect? I think currently we are around 10% hedged. So are we uh continuously 34:02 34 minutes, 2 seconds monitoring the prices and then I mean evaluating to increase or broadly 10 15% is what we expect and then rest leave it 34:10 34 minutes, 10 seconds to the market. I think as we said in the earlier calls also we will be our philosophy and policy has been to hail between 10 to 20%. And at this point of time we are comfortable with the 10%. 34:22 34 minutes, 22 seconds We'll see if the price will spike which we believe is not a sustainable kind of thing because of the war then we can look at but if you see the last quarter 34:29 34 minutes, 29 seconds we have not hed anything we continue to comfortable at 10%. 34:35 34 minutes, 35 seconds Okay. And generally uh how far can we do it based on liquidity? Are we also evaluating FI28 or only currently one or two quarters ahead? 34:46 34 minutes, 46 seconds We will not be going beyond 20 months. That is very short. 34:50 34 minutes, 50 seconds Understood. Understood. And just one last question. Can I ask one more question? Yeah. Yeah. Please go ahead. 34:57 34 minutes, 57 seconds Okay. with with respect to a uh half a million ton fertilizer plant uh can you share what what is the volume 35:05 35 minutes, 5 seconds expectation ramp up schedule economics and are we facing any RM challenges there due to 35:12 35 minutes, 12 seconds the ongoing conflict in Middle East we have not started operations at all and another 3 months down the line we 35:19 35 minutes, 19 seconds should be able to start our phosphoric acid plant which is the first part then maybe 2026 35:27 35 minutes, 27 seconds end or 27 early which is January we will be able to start our uh DAP manufacturing plant. So right now there 35:35 35 minutes, 35 seconds is no impact of rock prospect and all that on our operations. 35:41 35 minutes, 41 seconds Okay. All right. Okay. That's that's very useful. Thank you and all the best sir. Yeah. 35:48 35 minutes, 48 seconds Thank you. Next question is from the line of Rashi from city. Please go ahead. 35:54 35 minutes, 54 seconds Thank you. So what was the uh revenue and the from the lead concentrate sale during the quarter please? 36:01 36 minutes, 1 second Quarter four you must be asking. Yes. 36:04 36 minutes, 4 seconds So quarter 4 the revenue was around 500 K and AITA was around 330 K. 36:16 36 minutes, 16 seconds Hello Rashi. Does that answer your question? 36:18 36 minutes, 18 seconds Yes. Yes. I still have a followup question. So your or if your EBIT has actually declined sequentially on the sale of the lead concentrate 36:27 36 minutes, 27 seconds depends upon the how much lead concentrate you are selling. We are not into the business of selling the concentrate since we were having the MIC 36:34 36 minutes, 34 seconds production higher compared to the metal production that's why we used it and I don't think AITA has gone down. Abita in 36:41 36 minutes, 41 seconds QC was around 250 K and this time 330 K but of course it is not on account of the it is a function of the prices USD 36:49 36 minutes, 49 seconds INR rate at the at the same time TCRC and the quantity which you sell. 36:53 36 minutes, 53 seconds Got it. On the hedging what was the hedging loss in the fourth quarter? So aging I will not say it's a loss. It is 37:01 37 minutes, 1 second a delta compared to the prevalent market prices 1100 K rupees was sorry how much 1100 K rupees was the 37:10 37 minutes, 10 seconds delta between the H price and what was the market price? 37:14 37 minutes, 14 seconds This is for the fourth quarter and for the full year what is this number? 37:21 37 minutes, 21 seconds The delta was 1,500 K. 37:25 37 minutes, 25 seconds Okay. On the capex, could you just break down the 26 capex into growth and maintenance? What was the actual number and maintenance? 37:34 37 minutes, 34 seconds Capex was 3,600 cr uh for the full year and growth capex was 2,000 cr 36 was maintained 22. Okay. 37:45 37 minutes, 45 seconds Yeah. Thank you. Thank you. 37:47 37 minutes, 47 seconds Thank you. We'll take our next question from the line of Jam Sha from Securities and Finance. Please go ahead. Uh I'm audible sir. 37:58 37 minutes, 58 seconds Yeah. Thank you so much for this opportunity and congratulations on the good set of results. So my question is uh related to what was asked before. So you said that you know you will be 38:07 38 minutes, 7 seconds planning to take the renewable energy share to 32 to 35%. So could you could you just give us the timeline of how are we going to reach to 70%. 38:17 38 minutes, 17 seconds 70% is by FI28 as we committed earlier as well as part of our sustainability goals. By fi 28 we will be 70% round the clock. 38:26 38 minutes, 26 seconds No. So my question is because uh at 18% we are at the zinc cost of production at uh 9003. So while we reach to 32 to 35% 38:35 38 minutes, 35 seconds and eventually to 70 uh would this change our you know zinc cost of production estimate. 38:41 38 minutes, 41 seconds So it will depend upon the own generation cost. So it is a function of the what is the imported coal prices at that point of time. what will be the 38:49 38 minutes, 49 seconds domestic coal prices already at that point of time. So at currently uh in this year we had a benefit of the uh 38:56 38 minutes, 56 seconds lower coal prices and the domestic coal utilization. So we earlier said that every 2% renewable energy increase will 39:05 39 minutes, 5 seconds have a $1 cost reduction. We still stand by it given the long-term coal prices. 39:09 39 minutes, 9 seconds So if we move from 20 to 70% we can see the further potential of $25 per cost reduction. 39:17 39 minutes, 17 seconds Okay, understood. And in terms of VAP share for FI26, if you could just share the number and also an adjoining question would be that we are planning 39:25 39 minutes, 25 seconds to take it to 50%. With that in mind, how much realization would improve for us in the coming years? 39:32 39 minutes, 32 seconds So I think earlier as I said earlier, VIAP is not like other businesses like in aluminium where the VIP commands the 39:39 39 minutes, 39 seconds $500 or $1,000 extra incremental NP. So it's not like that. Of course, we are also into VIP. we have around 24% VAP in 39:47 39 minutes, 47 seconds FI26 but in our in Hindu in a zinc case VAP hardly commands $50 to $60 per ton over and above the uh normal uh what you 39:57 39 minutes, 57 seconds say the SSG zinc. So it is not a more on it is not on account of the profit it is more on account of the supplying to the 40:04 40 minutes, 4 seconds customers who requires in India. So this help us to increase the domestic market share in India. 40:10 40 minutes, 10 seconds Okay. And when do we plan to come up with the you know final plan of 600 KT that we have mentioned in our uh you know slide number 26 uh you know and 40:19 40 minutes, 19 seconds detailed plan on how much the capeex and revenue potential would be uh that would be helpful in some three question then Mr. Mr. explained about the whole thing 40:28 40 minutes, 28 seconds that we are working on a 1 million ton dismeter out of this 250 KT already started at within Rajasthan and while 40:36 40 minutes, 36 seconds the quarter one end we should be ready with a complete conceptual plan and the layout of the plant and the engineering and then we can see in the July or some 40:44 40 minutes, 44 seconds that time we can have a board announcement after the full feibility. Okay. Okay. No, thank you so much sir. Thank you and best of luck. Thank you. 40:53 40 minutes, 53 seconds Thank you. 40:54 40 minutes, 54 seconds Next question is from the line of Vikas Singh from ICA securities. Please go ahead. 41:00 41 minutes Good evening sir and thank you for the opportunity. So my first question pertains to our silver hedging strategy. 41:09 41 minutes, 9 seconds I'm a little bit perplexed because silver prices in the last quarter has touched even 100 plus dollars. So if we 41:17 41 minutes, 17 seconds are hinging certain quantity as a you know as every month certain quantity our average should have been higher than 41:24 41 minutes, 24 seconds what you have said in at the opening remark. So just wanted to understand had we stopped hedging after certain point 41:32 41 minutes, 32 seconds of time realizing our mistake and then this prices turned uh upside down what happened actually 41:41 41 minutes, 41 seconds because just a humble request I don't think anybody could say it's a mistake every company has their own policy of hinging the volume so we as earier said 41:50 41 minutes, 50 seconds 10 to 20% annual volume we will h and accordingly we h the 10% for this year last year 20% and we stopped hazed is 41:58 41 minutes, 58 seconds after the 10% hedging. So you are right after the Q3 we have not hazed anything but that is not on account of anything else it is more account of what company 42:07 42 minutes, 7 seconds follows the strategy given that 58 59% kind of aa margin of the company we believe that and silver being a byproduct we believe that it's not 42:16 42 minutes, 16 seconds worthwhile to experiment and do the hing beyond 10%. And every company has a philosophy in the you have the Indian 42:23 42 minutes, 23 seconds counterparts in the other metal business who has the 40 to 60% h for the many of the quarters. So I don't think it is a mistake. It's more about the strategy. 42:32 42 minutes, 32 seconds You always have a open position over 80% on which you can earn much better for by the hedging. I would not say prayer to the god that prices should fall. Prices 42:41 42 minutes, 41 seconds should always be increasing on the remaining portion. 42:45 42 minutes, 45 seconds Understood. No, but I mean that you are talking about 10% hedging but at the end of 2Q your overall hedging for the 42:54 42 minutes, 54 seconds remaining of second half FI26 was almost 45 50% of the total silver which you are supposed to produce. So that's why I'm 43:04 43 minutes, 4 seconds saying is there any is there any standardization that I would keep on hedging 10 or 15% on a rolling basis? Uh 43:12 43 minutes, 12 seconds how should we look at it? So uh we are not following the policy of the ruling 12 months. However, at the same time our 43:19 43 minutes, 19 seconds philosophy that we will not go beyond 12 months and we'll be reooking whenever required 10 to 20%. If I at 10% there's 43:26 43 minutes, 26 seconds no compulsion that I have to go up to the 20%. It is also not a compulsion that if I unwind the position then I have to again increase to 10%. 43:37 43 minutes, 37 seconds Noted sir. So my second question pertains to our long-term target of 2 million ten assuming there would be a 43:44 43 minutes, 44 seconds minimum of 25% kind of the you know additional premium which you might have to pay uh and the capex cost would also 43:53 43 minutes, 53 seconds be higher. So any IR estimates which we have done for the new project uh if you could share with us 44:01 44 minutes, 1 second for 250 KTPA we have already done the IR estimate and we don't declare the IR but as I said earlier it's a double digit IR and much much better than compared to 44:09 44 minutes, 9 seconds industry benchmark and because it also reflects on account of our lowest cost of production uh in terms of OPEX and in terms of capex also when we announced we 44:18 44 minutes, 18 seconds say it's around $2,600 per turn capex cost so you IR is a double digit And for the 1 million t we need to yet work 44:27 44 minutes, 27 seconds because once we have the conceptualization layout and everything engineering technology finalization then only we can do but of course I can 44:35 44 minutes, 35 seconds confirm that it will be a double digit IR. 44:38 44 minutes, 38 seconds No sir thank you for answering my question and all the best officer. Thank you. 44:42 44 minutes, 42 seconds Thank you. We'll take a last question from the line of Pratik Singh from IFL Capital. Please go ahead. 44:51 44 minutes, 51 seconds Hi uh thanks for the opportunity. Uh the first question is just a clarification on the dividend. So I think in the past 44:58 44 minutes, 58 seconds we had a status jugen policy of a minimum of uh 30% of PAT uh uh given that the PAT or EPS 45:08 45 minutes, 8 seconds last year was around 30 rupees. So just to clarify for FY26 the dividend given was 10 rupees right not 21. This 11 will count in FY 57. Is that correct? 45:18 45 minutes, 18 seconds Yeah. Yeah. 10 rupees was the dividend in FI 26. Understood. And 11 will count for 27. 45:24 45 minutes, 24 seconds Understood. So, and minimum 30% there is a policy that that stays as of now regardless of Olympics. Absolutely. 45:32 45 minutes, 32 seconds Understood. Thanks. And the second question is largely on the other operating income increase. I'm not sure if it was covered in opening remarks, but we saw a decent increase in other 45:41 45 minutes, 41 seconds operating income. What was that driven by? uh was sulfuric acid sales part of it and how are we seeing the prices of 45:48 45 minutes, 48 seconds acid sales uh visa v let's say 3q or have they just started increasing in 1q only so other operating income consist of two 45:56 45 minutes, 56 seconds main item one is the as you said sulfuric acid and uh and second is the byproducts and various scrap and residue which we sell second as I say we have 46:04 46 minutes, 4 seconds entered into the agreement with the third parties for setting up the ancillary businesses in which it's a waste to where we provide them the residue they process it and they provide 46:13 46 minutes, 13 seconds the finished goods like or other metals which are further used in our processes. 46:18 46 minutes, 18 seconds So that as per the accounting that goes that around 600 cr rupees for the whole year is part of other operating income as well as also part of the other 46:27 46 minutes, 27 seconds expenditure. You see the other expenditure is also increased. So it's a offsetting item but accounting doesn't allow to do the offsetting. It has to capture into both other operating income 46:35 46 minutes, 35 seconds and other expenditures. From the costing point of view two items come to the cost credit. One is a scrap as residue sales which is around for the whole year was 46:43 46 minutes, 43 seconds around 1,000 K and the remaining is the sulfuric acid which is around 1,400 K. 46:50 46 minutes, 50 seconds Understood. And how are sulfuric acid prices right now versus let's say 4K. So it is a linked to the sulfur index. 46:57 46 minutes, 57 seconds So the sulfur so and as the sulfur index moves the prices also get quarterly reset. 47:04 47 minutes, 4 seconds Okay. And just one last question on the cold side again I'm not sure if you covered it earlier. what was the coal sourcing mix and how are we seeing the 47:12 47 minutes, 12 seconds option prices by coal India uh given uh that you know there is gas shortage so to convert into coal so during the whole year we were around 47:20 47 minutes, 20 seconds 53% domestic coal materialization and 18% were the renewable energy so overall 47:27 47 minutes, 27 seconds around 70% from the this way or 30% was the imported coal if you go for the Q4 around 64% was the domestic coal and 18% 47:36 47 minutes, 36 seconds this and the remaining was the imported coal So we believe we have the linkage coal auction where the prices are determined by the government of this 47:45 47 minutes, 45 seconds coal India. We have not seen any steep increase in the domestic coal given that uh at this point of time there's a huge 47:52 47 minutes, 52 seconds delta between the import and domestic coal almost around 40%. Domestic coal will always be cheaper for us. 47:59 47 minutes, 59 seconds So domestically we source only via linkage not by e auctions very marginally through e auction. 48:06 48 minutes, 6 seconds Understood. Understood. Thanks. Thank you all for answering my questions and all the best. 48:11 48 minutes, 11 seconds Thank you. I now hand over the conference to Miss Raia Jen for closing comments. Over to you. 48:19 48 minutes, 19 seconds Thank you operator. Thank you everyone for joining us today on this call. If there are any follow-up questions or any clarifications required, please feel free to reach out to the relations team. 48:29 48 minutes, 29 seconds Thank you. 48:30 48 minutes, 30 seconds Thank you. On behalf of Hindustan Zinc, that concludes this conference. Thank you for joining us and you may now disconnect your lines.