CFO’s Statement

FY2025 marks a milestone year in Hindustan Zinc’s legacy of financial excellence.

NAVIGATING UNCERTAINTIES WITH PRUDENCE

The base metal sector experienced volatility in CY2024, starting off as an underperforming asset class. However, it rebounded in the latter half of the year, as demand improved. Both base metal (zinc) and precious metal (silver) prices finished the year in positive territory, supported by renewed optimism in their long-term demand outlook.

Through disciplined capital allocation and a strategic balance between ESG commitments and fiscal prudence, we continue to strengthen our operational efficiency while delivering sustainable and robust financial performance with a strong balance sheet.

STRENGTHENING FINANCIAL FOUNDATION WITH COST DISCIPLINE

At Hindustan Zinc, we pride ourselves on our global cost leadership. We have fostered a culture of cost discipline through systemic operational efficiency initiatives, AI integration, and a focus on automation and digitalisation across our operations.

Furthermore, during the year, we increased usage of domestic coal and renewable energy, and achieved better by-product sales. We also benefited from softened coal and input commodity prices. Together, these resulted in an impressive cost performance and strengthened our margin profile. We closed the year with a 16-quarter lowest zinc cost of production of US$ 994 per tonne in Q4 FY2025, and a 4-year low of US$ 1,052 per tonne on a full-year basis.

DELIVERING RECORD FINANCIAL PERFORMANCE

Hindustan Zinc delivered its second-ever best financial performance in FY2025. Our total revenue increased by 18% to ₹ 34,083 crore, driven by strong demand and firm prices of commodities, higher production volumes, and a strong dollar environment. Hedging gains and higher by-product sales further helped, partially offset by lower lead prices and silver volumes.

Our profitability outpaced revenue growth, as we furthered our cost leadership. We closed the year with a 28% growth in EBITDA to ₹ 17,465 crore, 33% growth in profit after tax to ₹ 10,353 crore, reflecting our tight cost control and balanced operating leverage. EBITDA margins expanded by 400 basis points to an industry-leading c.51%.

STRONG LIQUIDITY, STRENGTHENED BALANCE SHEET

During FY2025, we continued to strengthen our financial foundation. Our free cash flow (FCF) generation (before investment in growth capex and renewable energy) remained robust at ₹ 10,857 crore. This allowed us to internally fund growth capex, reduce debt, and distribute returns to shareholders, all while maintaining a solid liquidity profile.

Our gross investments and cash & cash equivalents were robust at ₹ 9,482 crore, invested in high-quality debt instruments. The total borrowings outstanding as of March 31, 2025, were ₹ 10,651 crore. With a fortified balance sheet position and a healthy growth outlook, we continue to maintain an investment-grade credit rating of AAA from CRISIL.

DELIVERING VALUE TO SHAREHOLDERS AND THE NATION

FY2025 was an exceptional year in delivering value-accretive returns to all our stakeholders. We are among the Top 10 wealth creators in Nifty 200. Backed by our solid financial performance, our Return on Capital Employed (ROCE) increased to an industry-leading 58%. We delivered one of the country’s best total shareholder returns of c.68%, outperforming Nifty 50 returns by 13x and Nifty Metal Index by 7x. Dividend payout stood at ₹ 29 per share, translating into a total dividend distribution of ₹ 12,253 crore and a dividend yield of 5.6%, amongst the highest in the country, while the total shareholder returns including dividend stood at ₹ 198.60 per share.

Our market capitalisation at ₹ 1.95 lakh crore is among the top three companies in the Nifty Metal Index, 39^th overall basis (62^nd on March 31, 2024), and the highest among global zinc players. In another milestone, Hindustan Zinc was recently included in the NSE’s Futures & Options (F&O) segment, which is set to open ample opportunities for liquidity, investor participation, and value creation.

We also contributed ₹ 18,963 crore towards the exchequer, which is 44% higher than the previous year. This includes income tax of ₹ 4,652 crore and royalty of ₹ 4,154 crore to the Rajasthan State Government, accounting for 35% of the state’s total royalty income.

LOOKING AHEAD

We step into FY2026 with robust fundamentals, even as market volatilities from the ongoing trade war persist. Our strong balance sheet and a structurally leaner cost base, coupled with our leadership in critical metals and clear strategic direction, position us to navigate external headwinds. We will continue to pursue expansion, cost efficiency and digital transformation projects to strengthen our edge and continue delivering a consistent, industry-leading return.

Sincerely,

Sandeep Modi Chief Financial Officer