Hindustan Zinc (500188) Investor presentation summary

Competitive position and asset base

• World’s 2nd-largest integrated zinc producer and 3rd-largest silver producer; India’s only integrated zinc-lead-silver producer, with 75% primary zinc market share.

• FY24 capacities: zinc smelting 913 ktpa, lead smelting 210 ktpa, silver refining 800 tpa and metal capacity 1.12 Mt.

• Total reserves and resources of 456.3 Mt, containing 30.8 Mt of metal; mine life exceeds 25 years, with the 2nd-highest zinc R&R base globally.

• FY24 ore production included 4.93 Mt at Rampura Agucha, 5.65 Mt at Sindesar Khurd, 4.03 Mt at Zawar, 1.34 Mt at Rajpura Dariba and 0.56 Mt at Kayad.

Production and market outlook

• FY24 refined metal production was 1,033 kt and silver production was 746 t; silver output rose ~5% YoY and ranked 3rd globally.

• FY20–FY24 production CAGR was 4.4% for refined metal and 5.2% for silver; FY25E targets are 1,075–1,100 kt refined metal and 750–775 t silver.

• FY25E mined metal target is 1,100–1,125 kt; planned YoY growth exceeds 3% for mined metal, 5% for refined metal and 2% for silver.

• Global steel demand is forecast to rise 1.2% in FY25, with India up 8.2%; domestic zinc demand is expected to remain strong.

Financial performance and shareholder returns

• EBITDA margin is described as ~50%; FY24 free cash flow from operations was $1.6bn, before $467m capex, including $105m growth capex, and $37m renewable-power investment.

• Zinc cost of production reached its lowest level in three years in FY24; costs improved for five consecutive quarters, with cumulative improvement of ~ $240/t.

• Q1 FY25 total shareholder return was 132%; market capitalization reached $41bn after adding $19bn, and dividend payout was $506m, equivalent to 500% of face value.

• Q1 FY25 shareholder returns were 18x NIFTY 50 returns and 7x NIFTY Metal returns; annualized EV/EBITDA was ~18x.