Hindustan Zinc Ltd Q2 FY26 – ₹8,549 crore revenue, ₹2,649 crore PAT, and still mining more drama than ore
1. At a Glance
Welcome to Zinc City, Udaipur — where even the air smells like dividend yield (5.8 %) and government negotiations. Hindustan Zinc Ltd (HZL), India’s metal mint and the Tata Salt of the mining world, clocked Q2 FY26 revenue of ₹8,549 crore and PAT ₹2,649 crore, up 11.6 % QoQ. Market cap ₹2.11 lakh crore, CMP ₹500, stock P/E 20×, ROE 72 %, and ROCE 61 %. The company mines zinc, lead, and silver — but mostly, it mines cash.
While others cry about power costs, HZL runs its own captive plants, renewable tie-ups, and still complains about the rupee. Its OPM = 52 % — basically printing profit like India prints commemorative coins. Government still holds 27.9 %, Vedanta holds 61.8 %, and both are busy deciding who needs the cash more.
2. Introduction
If mining were a Bollywood movie, Hindustan Zinc would be the Salman Khan of the sector — unshakeable, always in the news, and occasionally caught flexing too hard. Incorporated 1966, this PSU-turned-Vedanta baby sits atop 456 million tonnes of reserves, enough to outlive several Finance Ministers.
HZL’s story is one of two governments: the one that privatised it and the one that still can’t let go of the remaining 29 %. The company runs India’s entire zinc ecosystem — from blasting ore at Rampura Agucha to refining silver at Pantnagar. It’s also among the world’s top-3 silver producers, yet Indians still prefer Jio Fiber over fibre optic cables made of HZL metal.
The Q2 FY26 results were classic HZL: strong cash flow, strong dividend, and stronger rumours of demerger. Every quarter is a mining-opera with Vedanta pledging shares, GoI planning exits, and auditors checking if the company’s reserves last longer than India’s coal subsidies.
3. Business Model – WTF Do They Even Do?
Simple: dig it, melt it, sell it, repeat.
HZL’s empire covers the entire zinc-lead-silver value chain. Mines like Rampura Agucha, Kayad, Zawar, Chanderiya and Dariba churn out ore that gets refined in their smelters. End products? Zinc (62 % revenue FY24), Lead (14 %), Silver (19 %), Others (5 %). Exports ≈ 25 % turnover — because foreigners love our minerals more than our mutual funds.
Backward integration keeps costs world-lowest (US$ 1,050 – 1,100 per MT FY25 guidance). HZL generates its own power, builds its own wind farms, and soon will probably mine its own board resolutions. A true vertical monopoly with a horizontal sense of humour.
You know how Ola drivers keep saying “Sir, last trip”? HZL does the opposite — every year it adds reserves equal to five more years of mining. That’s why the world calls it “the lowest-cost zinc producer”; auditors call it “the one client that actually pays on time”.
Commentary: When your EBITDA margin is 50 %+, you’re not a company — you’re a money laundering dream done legally.
5. Valuation Discussion – Fair Value Range Only
Method 1 – P/E Approach Industry P/E ≈ 33. HZL trades at 20×. Even after hair-cutting for Vedanta pledge headaches and commodity cyclicality, a fair band ≈ 18–25×. → EPS ₹ 24.8 → Fair Value Range ₹ 446 – ₹ 620.
Method 2 – EV/EBITDA EV ₹ 2.22 lakh cr / EBITDA ₹ 17.5 k cr ≈ 12.6×. Industry average 14×. Fair band ≈ 11–14× → ₹ 480 –
