Hindustan Zinc Limited — Credit Ratings, 07-01-2025: Credit Rating- New

Consolidated financial results show Hindustan Zinc Limited (HZL) with an operating income of ₹16,382 crore for H1 FY2025, reflecting a decrease from ₹28,932 crore in FY2024. The company reported a net profit of ₹4,672 crore, down from ₹7,390 crore in FY2024, translating to an EPS of ₹9.8 compared to ₹15.2 the previous year. Key drivers of the decline in revenue and profit include operational cost increases, although the operating profit before depreciation, interest, taxes, and amortization (OPBDITA) margin has remained relatively stable at 49.3%.

Operational costs have risen, but the cost structure remains supported by HZL's integrated mining operations and efficient processes. The cost of production is estimated to hold between $1,050-1,100 per metric ton, aided by higher-grade zinc reserves, which were recorded at 5.69% in FY2024 versus 5.53% in FY2023.

The company maintains a healthy balance sheet, with total debt standing at ₹14,625 crore and a debt to OPBDIT ratio of 0.9 times. Strong financial metrics include an interest coverage ratio of approximately 14.4 times, demonstrating solid debt servicing capability.

Looking ahead, HZL's strategy seems focused on maintaining operational efficiency and exploring expansion opportunities amid favorable domestic demand projected at 7-8% growth for non-ferrous metals in FY2025. Given the financial performance and operational management, a hold insight appears appropriate, considering both the prevailing challenges and potential for future recovery.