HZL will make India atmanirbhar in zinc-based batteries, says CEO seeks Indian partners to set up plant

The company had earlier announced that it had entered into a strategic partnership with US-based AEsir Technologies to explore zinc-based energy storage solutions and reduce dependency on other critical minerals.

“The world is going through an energy transition, so everybody is looking for a solution and with lithium being costly, not widely available, and has safety issues, so, we thought it to be the right opportunity for the Zinc business to get into it," said Arun Misra, CEO, HZL.

Describing zinc-based batteries as safer and cheaper than lithium-ion-based batteries, he added, “We have signed up agreement with the USA-based company, who are excellent in producing zinc-nickel batteries and we are looking to get partners in India, who would put up mega factories for producing zinc batteries. We’ll make India atmanirbhar in these battery solutions also."

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The company hasn’t allocated any investment amount for the project, as it is expecting to look into it with AEsir Technologies. “We need a partner who manufactures batteries. We need a new investor, all that we'll look at," emphasized Sandeep Modi, CFO, HZL.

HZL on Friday also announced its results for the first quarter that ended 30 June, recording a 19.39% year-on-year rise in its consolidated net profit to ₹2,345 crore, driven by operational efficiency. This is against a net profit of ₹1,964 crore in the corresponding quarter of the last fiscal year.

Consolidated revenue from operations was up 10.99% to ₹7,893 crore against ₹7,111 crore in the corresponding quarter of the previous year. The company’s core business verticals—zinc, lead, and others—saw an 11.39% rise on-year to stand at ₹6,421 crore. At the same time, silver metal revenue increased by 9.93% from last year to ₹1,427 crore.

The company beat Bloomberg estimates of ₹7,862 crore revenue and ₹ 2,164 crore profit after tax.

The company attributed this rise in revenue to better metal volume, and metal and silver prices. According to the company, zinc (12%) and silver (20%) LME prices rose in double digits year-on, while lead LME prices saw a marginal rise (2%) over the year.

“We expect the zinc prices to continue remaining at these levels till December and then exceeding January onwards. Besides that, we will continue to reduce our costs and keep improving our margins," Misra said.

The company currently is in the process of demerging its business by creating two companies—zinc and lead, and a second one for silver—as its minority stakeholder, the mines ministry, prioritizes a “strategic stake offload" in the company. The ministry holds a 29.54% stake while Vedanta owns the majority 64.92 % stake in HZL.

Read more | Hindustan Zinc to maximize silver production amid record rally

“The discussions over demerger with the government continue; there is no set timeline for its completion, but we strongly believe that we can create further value for the company by ensuring the creation of separate verticals for the recycling and silver businesses in the coming days," added Misra.

During the first quarter ended 30 June, the company recorded earnings before interest, taxes, depreciation and amortization (Ebitda) of ₹3,946 crore, an 18% year-on-year rise, with a 49.99% margin. The company has ₹2,500 crore in capex for the current fiscal year with ₹500 crore spent in Q1FY25. It has a robust free cash flow from operations of ₹3,432 crore.

“Ascertaining HZL’s global cost leadership, we have suppressed the cost of production for the quarter at $1,107 per tonne, clocking a figure lower than the last three financial years. With a holistic focus on operational cum financial excellence, we expanded the margins during the quarter, along with a commendable increase in the domestic primary zinc market share," said Modi.

HZL’s mined metal production during the first quarter was 264 kilotonnes (kt), up 2% y-o-y, on account of improved mined metal grades.

Refined zinc production for the quarter was 211 kt, up 1% y-o-y, while refined lead production for the quarter was 53 kt, down 2%. Refined lead production was at 51 kt, up 2% y-o-y. While, saleable silver production was at 167 tonnes, down 7% YoY in line with lead metal production and WIP as the company moved to pyro operations on lead mode from June 2024.