Hindustan Zinc likely to turn net debt-free by FY26: Ventura Securities

Hindustan Zinc Ltd (HZL), part of the Vedanta group, is expected to become net debt-free by the upcoming financial year, even with substantial investments in capacity growth, as stated in a report.

Brokerage company Ventura Securities projects that worldwide demand for base metals—specifically zinc and lead—will likely increase at a CAGR of 6 to 7 percent… In terms of domestic production, India exports more zinc than it imports, but it faces a shortfall in lead resources. Both of these situations are advantageous for HZL.

“HZL is anticipated to achieve a net debt-free status by FY26,” it stated.

The nation’s biggest producer of silver, lead, and zinc previously stated it anticipates lowering its debt to roughly Rs 2,000 crore by the end of March, down from approximately Rs 6,000 crore at the conclusion of the September quarter. Investment demand for silver is rapidly increasing, and its application in industrial uses is continuously growing.

The prompt expansion of silver production capabilities is promising, considering the surging demand, according to the report. HZL has outlined a capacity expansion plan of Rs 16,000 crore, which encompasses sustaining capex, for the FY 24-27 period to finance the roaster facility in Rajasthan’s Debari, the fumer and fertilizer plant at Chanderiya (sulphuric acid forward integration) in the desert region, and an addition of 450 mw in renewable energy.

The brokerage company stated that it is optimistic about HZL’s growth initiatives, anticipating they will aid in revenue increase. According to them, Hindustan Zinc is expected to gain from savings on power expenses and operating leverage, which will elevate the company’s profit after tax to Rs 11,402 crore by FY27.