Hindustan Zinc plans to double output by 2030, may revive demerger plan

MUMBAI: Hindustan Zinc is set to announce the next leg of its growth plan by July-August, chief executive officer Arun Misra said. Discussions for a demerger may also be back on the table after the demerger of its parent company Vedanta is completed, he said.

The Vedanta-owned company plans to double its production capacity by the end of the decade. The country's largest producer of zinc and silver currently has a production capacity of 1.13 million tonne, of which 919,000 tonne is for zinc.

In 2025, it announced adding 250,000 tonne of capacity, which is likely to be commissioned in fiscal 2029. "In the next phase, we will add about 650 KT, this will be for a smelter and some mills," Misra told ET in an exclusive interaction.


Also Read: Hindustan Copper plans Rs 7,189-cr capex over 5 years for expansion of mines

By 2030, Hindustan Zinc plans to have a refined metal capacity of 1.59 million tonne for zinc and 410,000 tonne for lead. The production capacity for silver will rise to 1,500 tonne per annum from 800 tonne currently.

Vedanta will spend $500-600 million on capital expenditure for growth projects in the current fiscal. It will also spend around $400-450 million as maintenance capex, taking its total spend for the year north of $1 billion.

In 2023, the board of Hindustan Zinc had proposed splitting its business into different verticals, but the plan was opposed by the Government of India on concerns that it may not be beneficial for minority shareholders. The government owns a 27.92% stake in the company. "After the demerger process (for Vedanta) is complete, would be the right time to talk about it," Misra said. "I don't want to put a timeline, but let's see how it pans out," he said.

Also Read: Government announces Rs 5K cr incentive for states to expedite mining blocks' auction, operationalisation

The company reported its quarterly earnings on Friday, and its revenue, profit and earnings before interest, tax, depreciation and amortisation (Ebitda) were at an all-time high in the March quarter. The company made a profit of Rs 5,033 crore in Jan-Mar, up 68% compared to the previous year. Revenue surged 49% on year to Rs 13,544 crore while Ebitda was at Rs 7,747 crore up 61% on year. Ebitda margin for the quarter rose 420 basis points on year to 57%.

For fiscal 2026, Hindustan Zinc made a profit of Rs 13,832 crore on a revenue of Rs 40,844 crore. Ebitda for the year stood at Rs 22,162 crore. All three of the metrics were at an all-time high, boosted by the surge in silver prices, which contributed to about 45% of the company's overall profitability. For fiscal 2027, Hindustan Zinc has guided for producing 1.1 million tonne of refined metal, and 680 tonne of silver.