Hindustan Zinc margin rises for third straight quarter as costs lag sales
Consolidated revenue grew 49.05% YoY versus 36.82% expense growth, while a higher tax rate limited net-profit growth to 67.6%.
Filed 24 Apr 2026, 14:11 IST · Hindustan Zinc Ltd (HINDZINC)
Key takeaways
- Consolidated operating margin rose 1.76 percentage points QoQ to 56.9%, extending its three-quarter climb.
- Revenue grew 49.05% YoY, outpacing expenses at 36.82% and lifting operating profit growth to 59.88%.
- The stock fell 0.61% on results day, within its 1.69% median absolute post-results move across eight quarters.
Price around the results
Revenue growth translated into operating leverage
Consolidated revenue growth of 49.05% YoY exceeded expense growth of 36.82%, which lifted operating profit by 59.88%. Pre-tax profit grew 78.5%, but net profit growth was lower at 67.6% as the tax rate rose 4.85 percentage points to 25.45%. Other income accounted for 4.15% of pre-tax profit, so it was not the main source of earnings growth.
Sequential margin gain came from slower cost growth
QoQ revenue increased 23.35% while expenses rose 18.51%, widening operating margin by 1.76 percentage points. Interest expense fell 4.1%, partly offsetting a 10.67% rise in depreciation below the operating-profit line. The company said its quarterly zinc cost of production was the lowest at $903 per tonne, while higher mine development partly offset improved full-year cost performance.
Margin has risen for three quarters and sits well above peers
Operating margin increased from 49.66% in Q1FY26 to 51.99% in Q2FY26, 55.14% in Q3FY26 and 56.9% in Q4FY26. The Q4FY26 margin was 3.86 percentage points above Q4FY25. It was 38.13 percentage points above the 18.77% median for the 51 Commodities peers that had reported.
Debari expansion adds capacity to the operating backdrop
The company said it commissioned a 160 Ktpa roaster at Debari. Management also said Indian steel production is expected to grow further to 300 Mtpa by 2030, which it linked to domestic zinc demand.
Initial market move was muted, followed by a larger rebound
The stock declined 0.61% on the results date, a move smaller than its 1.69% median absolute reaction across eight prior results. It gained 6.06% on the next trading day and 2.27% over five days, while the 30-day return was -4.8%. The results-day reaction coincided with a corporate action and volume was 2.31 times normal, so the move is not solely a results signal.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹13,544 cr | ₹10,980 cr | +23.35% | +49.05% |
| Other income | ₹280 cr | ₹318 cr | -11.95% | +23.35% |
| Expenses | ₹5,838 cr | ₹4,926 cr | +18.51% | +36.82% |
| Operating profit | ₹7,706 cr | ₹6,054 cr | +27.29% | +59.88% |
| Operating margin (%) | 56.90% | 55.14% | — | — |
| Interest | ₹187 cr | ₹195 cr | -4.10% | -25.50% |
| Depreciation | ₹1,048 cr | ₹947 cr | +10.67% | +3.35% |
| Profit before tax | ₹6,751 cr | ₹5,230 cr | +29.08% | +78.50% |
| Tax | ₹1,718 cr | ₹1,314 cr | +30.75% | +120.54% |
| Net profit | ₹5,033 cr | ₹3,916 cr | +28.52% | +67.60% |
| EPS (₹) | ₹11.91 | ₹9.27 | +28.48% | +67.51% |
Operating margin of 56.90% compares with a Commodities sector median of 18.77% across 51 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -0.61% | +0.53% |
| Next session | +6.06% | — |
| 5 sessions | +2.27% | +2.49% |
| 15 sessions | +7.50% | — |
| 30 sessions | -4.80% | — |
Volume on the results session was 2.31× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- Indian steel production is expected to grow further to 300 Mtpa by 2030, supporting domestic zinc demand.
Expansion
- A 160 Ktpa roaster was commissioned at Debari.
Competition
- Hindustan Zinc reported the lowest quarterly zinc cost of production at $903 per tonne.
Problems & risks
- Higher mine development partly offset the improved full-year cost performance.
What to watch
- Whether operating margin holds above 56.9% after three consecutive quarterly increases.
- Whether revenue continues to outpace expense growth after the YoY gap of 49.05% versus 36.82%.
- Whether the tax rate moves from 25.45% after rising 4.85 percentage points YoY.