The shares of this world’s largest zinc producer are in focus after it approved its first outlay with a 12,000 crore capex plan. In this article, we will dive deep into the details.
With a market capitalization of Rs 2,04,949 crores, the shares of Hindustan Zinc Ltd are currently trading at Rs 485 per share, down by 32.4 percent from its 52-week high of Rs 717.10 per share. Over the past five years, the stock has delivered a return of 173 percent.
On Tuesday, the company, through a stock exchange filing, announced that it has approved the setting up of a 250 KT integrated Zinc metal complex at Debari and associated mining and milling capacities at a capital expenditure of up to Rs 12,000 crore as part of the Company’s overall 2X growth plan.
The company aims to raise its metal production capacity by 250 KTPA, bringing total capacity from 1,129 KTPA to 1,379 KTPA, an increase of 22 percent. The expansion will take 36 months and will cost Rs 12,000 crore, paid through internal accruals and debt. The growth is taking place in the context of rising demand for zinc, driven by steel and infrastructure consumption.
The company reported a revenue of Rs 34,083 crore in FY25, up by 17.80 percent from its FY24 revenue of Rs 28,932 crores. Additionally, it reported a net profit increase of 33.43 percent to Rs 10,353 crore in FY25 from Rs 7,759 crore in FY24.
The stock delivered an ROE and ROCE of 73.04 percent and 61.11 percent respectively, and is currently trading at a P/E of 19.70x as compared to its industry peers of 37.16x.
Hindustan Zinc Ltd, a Vedanta Group company, is the world’s largest integrated zinc producer and one of the top 5 producers of silver globally. The company controls 77% of India’s primary zinc market, exports to over 40 countries, and is the world’s most sustainable metals & mining company according to S&P Global (2024).
Written by Satyajeet Mukherjee
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