Hindustan Zinc Q1 Results: Profit, Revenue Decline, But Beat Estimates

Hindustan Zinc Ltd.'s first quarter profit and revenue declined but beat analysts' estimates.

The integrated zinc producer's net profit fell 36.48% year-on-year to Rs 1,964 crore in the quarter ended June, according to an exchange filing on Friday. That compares with the Rs 1,943 crore consensus estimate of analysts polled by Bloomberg.

• Revenue down 22.42% at Rs 7,282 crore, as against a Bloomberg estimate of Rs 7,243 crore.

• Ebitda down 34.84% at Rs 3,347 crore, as compared with a Bloomberg estimate of Rs 3,212 crore.

• Margin fell by 876 basis points to 45.96% vs 54.72%. Analysts had forecast it at 44.3%.

• Net profit down 36.48% at Rs 1,964 crore versus a Bloomberg estimate of Rs 1,943 crore.

Profit before tax expenses from zinc and lead, its primary segment, fell 59% to Rs 1,442 crore. This decline was despite the company reporting the highest mined metal production at 2,57,000 tonne. Integrated zinc production was up 1% at 2,09,000 tonne and refined lead production was down 6% YoY at 51,000 tonne.

Profit from its silver business offered some respite, growing 14.7% at Rs 1,128 crore, with integrated silver production increasing 1% YoY to 1,79,000 tonne.

"We strongly believe that in a cyclical commodity business, protecting margins is fundamental, hence our strong focus lies on optimising cost and enhancing volume," said Arun Misra, chief executive officer at Hindustan Zinc.

Zinc cost of production before royalty for the quarter was 5.6% lower YoY at $1,194 (Rs 98,103) per tonne, majorly on account of softened coal and input commodity prices, better domestic coal availability, and further supported by better operational efficiencies year-on-year.

The stock fell 2.34% intraday, the most this week to Rs 315.6 apiece.

Shares of Hindustan Zinc were trading 1.7% lower at Rs 317.65 apiece after the results were announced, as compared with a 1% decline in the benchmark NSE Nifty 50 at 2.05 p.m.