35% Net Profit Growth: Hindustan Zinc Q2 FY25 Financial Results Analysis

Hindustan Zinc Q2 FY25 Results: Profit Jumps 35% As Revenue Up 21%

35% Net Profit Growth: Hindustan Zinc Q2 FY25 Financial Results Analysis

Consolidated net profit of Hindustan Zinc, part of Vedanta Group was up 35 per cent YoY at ₹2,327 crore in Q2 FY25 from ₹1,729 crore in Q2 FY24. Revenue from operations had increased by 20.93 per cent YoY at ₹8,004 crore and silver by 19.50 per cent in revenue. Zinc, lead, and others rose by 21.75%. The company also invested in Serentica Renewable India Pvt Ltd, marking another diversification in the portfolio. However, costs at 12.74% YoY rose to ₹5,309 crore .

Hindustan Zinc Q2 FY25 Results

Hindustan Zinc Q2 FY25 Financial Results

Category Q2 FY25 Q2 FY24 YoY Growth (%)
Net Profit (₹ Cr) 2,327 1,729 34.59%
Revenue (₹ Cr) 8,004 6,619 20.93%
Expenses (₹ Cr) 5,309 4,709 12.74%
Silver Segment Revenue (₹ Cr) NA NA 19.50%
Zinc, Lead & Others Segment Revenue (₹ Cr) NA NA 21.75%

Revenue Growth & Segmentation:

The company holds a dominant 75% market share in the domestic market. But its second-largest business is the silver business with growth following an upward slope. Especially, its silver segment’s growth was 19.50% YoY. Therefore, it becomes the third-largest silver producer in the world. Decent growth in the core business of the company has been established in zinc, lead, and other business segments with the up-growth of 21.75% revenue.

Financial Overview

Although cost inflation continues, Hindustan Zinc’s operational performance was fairly healthy. This added ₹5,309 crore in total expenses on an absolute basis, up 12.74% y-o-y. But revenues have grown by ₹8,004 crores, thereby overtaking cost inflation. This would reflect a monumental increase in profitability.

Promoters hold 63.42% of the promoter group stake in the company as of September 2024, reflecting in-house confidence in its performance.

Investment in Renewable Energy

Its diversification efforts further led the company to commit at least 26% equity to Serentica Renewable India Pvt Ltd or its subsidiaries. The investment will place the company in renewable energy, which is in line with global trends toward sustainability and clean energy, and is an indication that Hindustan Zinc will stand the test of time and grow.

Stock Market Performance

Share of Hindustan Zinc ends little the lower by 0.09% at ₹507.50, yet remains sprightly on a year-to-date basis at 59.39%. Metals have been driving the market with a fair amount of conviction throughout the year and have shown resilience as economic uncertainty shrouds the broader sector. Trading volumes stood high on BSE with nearly 1.87 lakh shares, much higher than two-week averages of 94,000 shares.

Technical Analysis & Metrics

Hindustan Zinc shares are trading below most of the major SMAs. Last few days, it has traded below all the 5-, 10-, 20-, 50-, 100- and 150-day SMAs. However, it trades above both its 30- and 200-day SMAs, meaning mixed near-term as well as long-term signals.

The P/E is at 26.25. The P/B is at 14.09. EPS is ₹19.35. The RoE of the firm is at a strong level of 53.67%.

The RSI at a scale of 14 days of this stock stands at 47.49, a value below 50. At an RSI value existing within the range of 30 and 70, this position puts the stock in the neutral neither-over-sold-nor-overbought position; otherwise, it is almost touching the over-sold zone.

Outlook and Future Prospects

Better times are ahead for Hindustan Zinc with stellar financial performance coupled with the added advantage of market leadership in both zinc and silver and strategic investment in renewable energy. Further light on the overall strategy and health of the parent will be seen by looking into the quarterly earnings report issued by Vedanta.

It demonstrates a robust capacity to absorb an increase in the costs of running against the trend of revenue growth. Forcing entry into renewables not only diversifies the portfolio but also brings the company in line with the global trends of sustainability, making Hindustan Zinc a forward-looking metals player.

Conclusion

Quite rightly, the Q2 FY25 results of Hindustan Zinc are good enough to justify its excellent business model and strategic growth in significant segments with an increasing cost of operations. Diversified revenue streams, good market presence, and a crisp focus on future growth through investments in renewable energy give Hindustan Zinc the continued success in both domestic and international markets.

The stock has been of good yield with short-term ups and downs. Long-term gains are always an asset to a long-term investor. However, as far as strategic vision and solid fundamentals are concerned, the company will probably continue its success journey in the next quarters.
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