Hindustan Zinc Ltd. expects its cost of production to fall by the end of this financial year even as higher costs led to a contraction in its margin in the third quarter ended December.
Expenses are down by about $40-50 per tonne in the ongoing quarter, Managing Director and Chief Executive Officer Sunil Duggal told BloombergQuint in a conversation.
Around 60 to 70 percent of the company's costs are derived from dollar and the rest vary with the rupee, he said. For the fourth quarter ending March, Duggal expects the costs to decrease, at least in dollar terms, as the company ramps up volumes, aided by completion of projects.
Revenue and profit of Hindustan Zinc, part of billionaire Anil Agarwal's Vedanta Group, declined year-on-year in the three months ended December, according to its exchange filing. Margin contracted as prices of zinc fell while cost of production rose.
Duggal said expensive coal imports increased input costs. But he said there was no reason why zinc prices should not bounce back.
Q3 Result Highlights (YoY)
- Net Profit falls 3.7 percent to Rs 2,211.
- Revenue slips 6.5 percent to Rs 5,540 crore.
- Ebitda down 12.5 percent to Rs 2,838 crore.
- Margin contracted to 51.2 percent from 54.8 percent.
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