Hindustan Zinc confident of robust sales volumes; expects zinc prices to hover around $3,200-3,400/tonne range

Vedanta group company Hindustan Zinc Ltd posted its Q3 earnings. The company posted a 22.7 percent jump in consolidated net profit to Rs 2,701 crore for the quarter ended December 31, 2021. The company had reported a consolidated net profit of Rs 2,200 crore in the year-ago period. Its revenue increased to Rs 7,990 crore for the quarter under review. For the year-ago period, the company's revenue stood at Rs 6,033 crore.

To discuss the company’s Q3 earnings and its outlook, CNBC-TV18 spoke to Arun Misra, CEO, Hindustan Zinc.

Misra is confident that the company will post a strong sales volume figure. He is sure that lead and zinc sales volume will hit the 1 million tonne mark in FY22. Going ahead, he expects silver volume at 170 tonne in Q4.

He said, “We have a target to hit the 1 million tonne mark and that will be the first stepping stone for Hindustan Zinc to prove its capability.”

On zinc prices, he believes it will remain elevated. He expects zinc prices to hover around $3,200-3,400 per tonne range. Misra said, “The current prices will continue in this quarter as well, anywhere between USD 3,200 and USD 3,400 per tonne should be a sustainable number looking at the input cost pressure that everybody is experiencing.”

On the cost of production, he mentioned that the aim is to cut it by $10-15 per tonne. He said, “We are targeting to bring it down further; ideally another USD 20 cut, we should expect, on a 9-month number which is currently at USD 1,116 per tonne. We should aim to cut it down by another USD 10-15 by working aggressively in Q4FY22.”

On the merger and acquisition front, Misra explained that discussions are underway for buying Vedanta’s zinc international asset. Also, demerging the company’s silver business is being seriously contemplated and discussions regarding the same are going on as well. He said, “One of the ways of increasing Hindustan Zinc’s valuation would be to exact the best valuation for the silver business, but when and how it will happen will depend on the shareholders of the company. At the right time, I will be able to comment on that but it remains a good idea and is under active discussion.”