Hindustan Zinc Expects Lower Costs, Higher Prices To Drive Volumes In Second Half Of 2019-20

Hindustan Zinc Ltd. expects its volumes to improve in the second half of the ongoing financial year as cost of production fell and global zinc prices rose.

“I expect the zinc prices ticking up to $3,000 (on London Metal Exchange) as the U.S.-China trade war eases out, and the global stockpile level stands at 3-4 days of consumption,” Chief Executive Officer Sunil Duggal told BloombergQuint in an interview.

The cost of production, Duggal said, will “definitely” come down in the coming quarters by 10-15 percent. That’s because commissioning and optimal utilisation of shafts in Rampura Agucha and Sidesar Khurd mines in Rajasthan will reduce the company’s dependence on trucks for hauling, he said.

Hindustan Zinc also cut guidance for metal production for 2019-20 to 950 kilotonne from 1,000 kilotonne, and that of silver to 650 metric tonne from 750-850 metric tonne projected as of March.

That’s mainly due to geo-technical issues in Sidesar Khurd mine which impacted the overall grade of output, Duggal said. “However, overall, our volume for second half of the year is on track.”

HZL Q2 Results: Key Highlights (Year-on-Year)

• Revenue fell 5.5 percent to  Rs 4,511 crore.
• Net profit rose 14.6 percent to  Rs 2,081 crore.
• Ebitda down 9.14 percent to Rs 2,117 crore.
• Margin stood at 46.9 percent versus 48.7 percent.

Watch | CEO Sunil Duggal On Hindustan Zinc’s Q2 Results 2019-20