Hindustan Zinc

Understood. I will provide a detailed analysis of Hindustan Zinc, covering:

A company profile with business segments and revenue sources.
Financial statements analysis (balance sheet, income statement, cash flow statement) for the past five years.
Key financial metrics including profitability, liquidity, solvency, and efficiency ratios.
Comparison with competitors in the Indian market, along with a broader comparison across the Asian market.
Insights using text-based analysis, supported by tables and charts where relevant.

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Hindustan Zinc: Comprehensive Analysis

Company Profile

Hindustan Zinc Limited (HZL) is India’s largest and the world’s second-largest integrated producer of zinc. It operates mines and smelters for zinc and lead, with silver and cadmium as important by-products (Hindustan Zinc - Wikipedia). HZL was originally a public sector company but was privatized in 2003, and it is now a subsidiary of Vedanta Limited (which holds ~64.9% stake) while the Government of India retains about 35% (Hindustan Zinc - Wikipedia). The company has more than 50 years of operational experience in mining and smelting, and it enjoys a near-monopoly in the Indian zinc industry – meeting ~80% of India’s zinc demand (Beneath The Surface: How Hindustan Zinc Grew To Become The World's Second Largest Zinc Producer - Forbes India). Its operations include five zinc-lead mines in Rajasthan (such as Rampura Agucha and Sindesar Khurd) and several smelting facilities. HZL’s key products and revenue streams are zinc (the primary product, used mainly for galvanizing steel), lead (used in batteries and alloys), and silver (a valuable by-product of lead-zinc ore) (Beneath The Surface: How Hindustan Zinc Grew To Become The World's Second Largest Zinc Producer - Forbes India) (Beneath The Surface: How Hindustan Zinc Grew To Become The World's Second Largest Zinc Producer - Forbes India). In fact, Hindustan Zinc is also the world’s third-largest silver producer, leveraging the high silver content of its ores (). The company’s business is divided essentially by these product lines, with zinc and lead metal sales constituting the bulk of revenue, and silver production providing a significant additional income stream. HZL’s integrated model – from mining to refining – and its large reserve base (it holds the second-largest zinc ore reserves globally) give it a strong competitive advantage in terms of scale and cost ().

Financial Analysis (Five-Year Financial Statements)

Over the past five fiscal years, Hindustan Zinc has demonstrated robust financial performance with growing revenues up to 2022-23, followed by a pullback in 2023-24 due to commodity price declines. Table 1 below summarizes the key figures from the income statements for FY2019-20 through FY2023-24:

Table 1: Hindustan Zinc – 5-Year Summary of Income Statement

Fiscal Year (FY)	Revenue from Operations (₹ Crore)	PBDIT (₹ Crore)	Net Profit (₹ Crore)	Net Profit Margin (%)
2019-20 (FY20)	18,561 ([

  Key Financial Information | Hindustan Zinc   ](https://www.hzlindia.com/investors/key-financial-information/#:~:text=Particulars%202023,35))        | 10,781 ([
  Key Financial Information | Hindustan Zinc   ](https://www.hzlindia.com/investors/key-financial-information/#:~:text=Revenue%20from%20operations%C2%A0,35))   | ~6,805 ([Hindustan Zinc - Dhan](https://dhan.co/stocks/hindustan-zinc-ltd-financial-results/#:~:text=cash%20flows%2C%20income%20statement%20with,Open%20FREE%20Demat%20Account%20%2B91))  | ~36.6% (high)        |

Sources: Company annual reports and financial disclosures ( Key Financial Information | Hindustan Zinc ) ([BOM: 500188|NSE : HINDZINC] HINDUSTAN ZINC Financial Statement Analysis-Mar 06,2025). Net profit for FY20 is estimated from EPS ( Key Financial Information | Hindustan Zinc ) and external data (Hindustan Zinc - Dhan).

Income and Profit Trends: HZL’s revenue grew from about ₹18,561 crore in FY20 to a peak of ₹34,098 crore in FY23 ( Key Financial Information | Hindustan Zinc ). This growth was driven by higher zinc and lead volumes and a surge in global zinc prices post-2020. In FY21 and FY22, the company benefited from a commodity upswing and increased production, resulting in revenue growth of ~22% and ~30% respectively (and an impressive 50% jump in FY22) ( Key Financial Information | Hindustan Zinc ). By FY22 and FY23, HZL achieved record output of refined metals, which, combined with strong zinc prices, boosted the top line. Net profits expanded in tandem – from roughly ₹6,800 crore in FY20 to over ₹10,500 crore in FY23 – maintaining very high net margins around 30-35% during those peak years ([BOM: 500188|NSE : HINDZINC] HINDUSTAN ZINC Financial Statement Analysis-Mar 06,2025).

However, FY2023-24 saw a reversal: revenue dropped ~15% year-on-year to ₹28,932 crore ( Key Financial Information | Hindustan Zinc ), and PAT fell to ₹7,759 crore (). The company explicitly attributed this decline to significantly lower zinc prices in the global market, which outweighed record-high production volumes (HINDUSTAN ZINC LIMITED Investor Presentation April 2024). In its FY24 results, HZL noted that average zinc LME prices were considerably weaker, squeezing revenue despite “highest-ever” metal output, though cost reductions provided some cushion (HINDUSTAN ZINC LIMITED Investor Presentation April 2024). EBITDA (PBDIT) in FY24 was about ₹13,700 crore, down from ~₹18,900 crore in FY23, reflecting the same pricing pressure (HINDUSTAN ZINC LIMITED Investor Presentation April 2024). Overall, the five-year trend shows HZL’s earnings are strongly influenced by the zinc price cycle: the company enjoyed a boom in FY21-FY23 and remains profitable even in down cycles due to its low-cost operations, but with somewhat lower earnings in weaker price environments.

Balance Sheet and Cash Flows: Hindustan Zinc’s balance sheet has historically been very strong, marked by high reserves and low debt, but it underwent significant changes in the last couple of years due to large dividend payouts. The company’s total assets stood around ₹40,000 crore in 2019, then declined to ~₹23,700 crore by March 2023 (Hindustan Zinc Balance Sheets, Financial Statements - The Economic Times). This was largely a result of cash outflows via dividends – HZL paid extraordinary dividends to shareholders (including the government and Vedanta) in recent years, reducing its retained earnings (reserves). For instance, retained earnings (Reserves & Surplus) fell from ~₹39,465 crore in 2019 to just ₹12,097 crore by March 2022 (Hindustan Zinc Balance Sheets, Financial Statements - The Economic Times), as the company distributed cash. Consequently, shareholders’ equity (net worth) shrank from over ₹40,000 crore in FY19 to ~₹12,942 crore in FY22 (Hindustan Zinc Balance Sheets, Financial Statements - The Economic Times). It recovered slightly to ₹15,233 crore by FY23 as the company held onto some earnings that year (Hindustan Zinc Balance Sheets, Financial Statements - The Economic Times).

Despite these payouts, HZL’s operating cash generation has been robust. The firm’s cash flow from operations has been sufficient to fund most of its needs; however, to support the massive dividends, HZL resorted to short-term borrowings. Notably, the company, which had virtually no debt in 2019, took on debt in FY20 and especially in FY22. Total borrowings rose to about ₹11,841 crore in FY22 (debt-to-equity nearly 1:1 at that point) (Hindustan Zinc Balance Sheets, Financial Statements - The Economic Times) ([BOM: 500188|NSE : HINDZINC] HINDUSTAN ZINC Financial Statement Analysis-Mar 06,2025). By FY23, some debt was repaid (total debt ~₹8,456 crore) bringing the debt/equity ratio down to ~0.55 (Hindustan Zinc Balance Sheets, Financial Statements - The Economic Times) ([BOM: 500188|NSE : HINDZINC] HINDUSTAN ZINC Financial Statement Analysis-Mar 06,2025). In essence, HZL’s balance sheet remains healthy – it’s still lowly leveraged – but the company is no longer net cash positive as it was historically, due to leveraging a bit for shareholder rewards.

The cash and short-term investments on HZL’s books have fluctuated accordingly. At the end of FY20, the company held over ₹9,300 crore in cash and bank balances (Hindustan Zinc Balance Sheets, Financial Statements - The Economic Times). By March 2023, cash on hand had dwindled to just ₹173 crore (Hindustan Zinc Balance Sheets, Financial Statements - The Economic Times), as most excess cash had been paid out. (The company typically parks surplus funds in short-term investments; total investments + cash were still around ₹10,600 crore in FY23, down from ₹20,000+ crore a few years prior (Hindustan Zinc Balance Sheets, Financial Statements - The Economic Times).) This strategy reflects HZL’s status as a cash-generative business with limited need for retained capital – it has opted to return capital to shareholders aggressively. From a cash flow perspective, operating cash flows have exceeded ₹10,000 crore in peak years, while capital expenditures have been relatively modest (around ₹2,500-3,500 crore annually for mine development and maintenance), allowing free cash flow generation and high dividends.

Summary of Financial Position: As of the latest year, Hindustan Zinc remains fundamentally strong. It has ample profitability and cash flows to cover its obligations. The company’s current financial position features a solid equity base (even after reductions) and manageable debt. The short-term liquidity, however, appears low by conventional metrics because of depleted cash balances: the current ratio fell below 0.5 in FY23 (current assets ₹3,868 Cr vs current liabilities ₹9,994 Cr) (Hindustan Zinc Balance Sheets, Financial Statements - The Economic Times). This indicates current liabilities exceeded current assets at year-end – largely because huge dividends were paid just before the balance sheet date, draining cash. Nonetheless, this does not signal distress; HZL’s liquidity is supplemented by its steady operational cash inflows and access to financing (for example, it can and does issue short-term debt like commercial paper to manage interim funding). In summary, the financial statements over five years portray rising revenues and earnings through FY23 with a pullback in FY24, exceptionally high profit margins, and a deliberate reduction in net assets as the company returned cash to shareholders. Even after these changes, Hindustan Zinc retains a strong financial footing with low leverage and the capacity to invest in growth projects or withstand downturns.

Key Financial Metrics (Profitability, Liquidity, Solvency, Efficiency)

Hindustan Zinc’s financial ratios over the past five years highlight its superior profitability and sound financial management:

Profitability: HZL enjoys industry-leading profitability. Its EBITDA margins have consistently been around 50-60% in recent years ( Key Financial Information | Hindustan Zinc ), reflecting low operating costs and high-value products. Net profit margins have ranged from about 27% (FY24) up to 35% (FY21) ([BOM: 500188|NSE : HINDZINC] HINDUSTAN ZINC Financial Statement Analysis-Mar 06,2025), which is extraordinarily high for a mining company. These high margins are driven by integrated operations (captive raw material and power), high-grade ores, and efficient cost control. The Return on Equity (ROE) has surged in the last two years due to lower equity base (after payouts) combined with solid earnings – ROE was ~25% in FY20-FY21, then rose to ~29% in FY22, and jumped to 44.5% in FY23 and over 55% in FY24 ([BOM: 500188|NSE : HINDZINC] HINDUSTAN ZINC Financial Statement Analysis-Mar 06,2025). This indicates exceptional value creation for shareholders in recent years. Even on Return on Capital Employed (ROCE), which factors in debt, HZL stood at ~37% in FY22 and ~50% in FY23 ([BOM: 500188|NSE : HINDZINC] HINDUSTAN ZINC Financial Statement Analysis-Mar 06,2025), demonstrating efficient use of capital assets. Such profitability metrics are well above industry averages.
Liquidity: As noted, the company’s current ratio has dropped sharply, from healthy levels a few years ago to below 1 now. For example, at the end of March 2020, current assets were ₹14,040 Cr vs current liabilities ₹6,689 Cr (current ratio ~2.1x), whereas by March 2023 current assets were only ₹3,868 Cr against ₹9,994 Cr of current liabilities (current ratio ~0.4) (Hindustan Zinc Balance Sheets, Financial Statements - The Economic Times). A current ratio under 1 normally raises concern, but in HZL’s case this is a result of cash being distributed; the company still generates strong operating cash flow each quarter to meet obligations. Additionally, a portion of current liabilities includes short-term debt that can be rolled over. The quick ratio (excluding inventory) is even lower (since inventory is ~₹1,900 Cr (Hindustan Zinc Balance Sheets, Financial Statements - The Economic Times), the quick ratio was ~0.2 in FY23), but again the liquidity risk is mitigated by the company’s cash-generating ability. HZL does not have significant liquidity tied up in receivables – trade receivables were only ₹161 Cr in FY23 (Hindustan Zinc Balance Sheets, Financial Statements - The Economic Times), indicating most sales are realized in cash or advance, which supports liquidity. Overall, while point-in-time liquidity ratios are low, HZL’s underlying liquidity position is manageable due to its ongoing cash inflows and financial flexibility.
Solvency: Hindustan Zinc has maintained a conservative capital structure. Debt-to-Equity (D/E) was essentially zero in earlier years (FY19-20) when the company had no debt. After the dividend-related borrowings, D/E rose to ~0.22 in FY20, remained modest at 0.09 in FY21, then spiked to 0.94 in FY22, and moderated to 0.58 by FY23 ([BOM: 500188|NSE : HINDZINC] HINDUSTAN ZINC Financial Statement Analysis-Mar 06,2025). These levels are still comfortable – a D/E of ~0.6 means the company’s debt is only about half of its equity. Interest coverage remains extremely high: HZL’s EBITDA is dozens of times larger than its interest obligations (for instance, interest expense in FY23 was only ₹290 Cr against an EBITDA of ~₹17,500 Cr ([BOM: 500188|NSE : HINDZINC] HINDUSTAN ZINC Financial Statement Analysis-Mar 06,2025)). The company’s solvency is also evident in its strong net worth and retained earnings (even after reductions). In short, HZL has very low leverage relative to cash flows, and it faces no solvency issues. Credit rating agencies have rated its debt highly due to large cash flows and backing from the parent group.
Efficiency: The company’s efficiency ratios reflect its high asset utilization after recent restructuring. Asset turnover (Revenue/Total Assets) improved dramatically when the asset base shrank – it was ~0.45x in FY19, rising to ~1.4x in FY22, and about 1.2x in FY23 (₹34k Cr revenue on ₹24.7k Cr assets) as assets were pared down. Fixed asset turnover has been stable to improving – HZL generated ₹1.5–1.6 of revenue for every ₹1 of net fixed assets in FY22-23, up from ~1.1 in FY19, indicating better utilization of its mining and smelting capacity. Inventory turnover is also strong: the company’s inventory (mostly ore, concentrates, and finished metal) is modest relative to cost of sales, implying inventory turnover on the order of 6-7x per year (roughly 50-60 days of inventory, which is reasonable for a metals producer). Notably, the company’s working capital management is very efficient – receivables days are near zero (most sales are either domestic cash sales or exports against letters of credit), and payables are managed through the group’s procurement strength. This results in a negative working capital cycle in some years (i.e. HZL can use supplier credit and advance payments to its advantage). In summary, Hindustan Zinc’s efficiency metrics underscore a lean operation: it converts its assets and inventory into sales quickly and keeps a tight rein on working capital.

To encapsulate the key metrics, Table 2 below shows some financial ratios for the last five years:

Table 2: Key Financial Ratios (FY20–FY24)

Ratio / Year	FY2019-20	FY2020-21	FY2021-22	FY2022-23	FY2023-24
EBITDA Margin (%)	58.1%	59.6%	59.2%	55.4%	50.9%
Net Profit Margin (%)	36.6%	35.3%	32.7%	30.8%	26.8%
Return on Equity (ROE, %)	~20%	24.7% ([[BOM: 500188	NSE : HINDZINC] HINDUSTAN ZINC Financial Statement Analysis-Mar 06,2025](https://www.smart-investing.in/mainFinancials.php?Company=HINDUSTAN+ZINC+LTD#:~:text=Earnings%20Per%20Share%20%28Rs%29%E2%82%B918,22))	28.9% ([[BOM: 500188	NSE : HINDZINC] HINDUSTAN ZINC Financial Statement Analysis-Mar 06,2025](https://www.smart-investing.in/mainFinancials.php?Company=HINDUSTAN+ZINC+LTD#:~:text=Earnings%20Per%20Share%20%28Rs%29%E2%82%B918,22))
Current Ratio (x)	2.10	1.39	1.00	0.54	0.39
Debt-to-Equity (x)	0.00	0.22	0.09	0.94	0.58
Asset Turnover (x)	0.45	0.58	0.79	1.38	1.22

Sources: Company disclosures and calculations ([BOM: 500188|NSE : HINDZINC] HINDUSTAN ZINC Financial Statement Analysis-Mar 06,2025) (Hindustan Zinc Balance Sheets, Financial Statements - The Economic Times). (ROE is based on consolidated results; FY20 ROE is estimated. Current ratio figures calculated from balance sheet data (Hindustan Zinc Balance Sheets, Financial Statements - The Economic Times).)

These metrics reinforce that Hindustan Zinc is exceptionally profitable (high margins, high ROE), has become more leveraged and less liquid in the short term due to its capital return strategy, but still maintains a strong overall financial health and efficiency.

Competitor Comparison

Indian Market Peers

In the Indian stock market, Hindustan Zinc is categorized under “non-ferrous metals” and is often compared with other metal and mining companies. However, HZL’s business is quite distinct from peers like Hindalco, Vedanta, National Aluminium Company (NALCO), or Hindustan Copper. Hindustan Zinc vs. Indian peers: A key point of comparison is profitability – HZL vastly outperforms most peers on margins. For instance, Hindalco Industries (a major aluminum and copper producer in India) had a net profit margin of only around 4–5% in recent years (Hindalco Industries Ltd. and Hindustan Zinc Ltd. - prices,charts), versus HZL’s ~30%+. Hindustan Zinc’s return on equity (40-50% recently) also dwarfs that of Hindalco (which is typically in the low teens). Even Vedanta Ltd, the parent company with diverse interests in oil, iron ore, aluminum, etc., does not match HZL’s profitability on its consolidated basis – Vedanta’s net margins are in single digits and its business is burdened with higher debt. Hindustan Copper, a small PSU copper miner, and NALCO, an alumina/aluminum PSU, both have far lower earnings and margins relative to HZL.

It’s worth noting that in India, Hindustan Zinc operates in a niche with little direct competition. The only other significant zinc smelter in India is Binani Zinc, which produces a negligible volume (~30,000 tonnes) compared to HZL’s ~800,000+ tonnes (Beneath The Surface: How Hindustan Zinc Grew To Become The World's Second Largest Zinc Producer - Forbes India). This near-monopoly status allows HZL to have pricing power in the domestic market (domestic zinc prices generally track international prices, but HZL controls most local supply). Peers like Hindalco and Vedanta are not direct competitors in product terms (they deal in different metals), but from an investor perspective, they are comparables in the metals & mining space. When comparing, HZL stands out for its higher margins and dividend yield. For example, HZL has historically offered a rich dividend yield (often >8-10% in recent years due to large special dividends), whereas Hindalco’s dividend yield is much lower. On the other hand, companies like Hindalco or Vedanta have pursued growth via large investments (e.g. Hindalco’s overseas acquisitions, Vedanta’s oil & gas and aluminum expansions), while HZL’s growth has been organic and relatively steady.

In terms of scale, Hindustan Zinc’s revenue (~₹30-34k Cr) is smaller than Hindalco’s (which exceeds ₹50k Cr in standalone turnover and much more consolidated) and Vedanta’s (which is also much larger due to oil and other segments). But HZL’s market capitalization is comparable or higher than many peers because of its superior profitability and cash generation. As of early 2025, HZL’s market cap is around ₹1.8 lakh crore ([BOM: 500188|NSE : HINDZINC] HINDUSTAN ZINC Financial Statement Analysis-Mar 06,2025), making it one of the top companies in the Indian metals sector. This indicates the market’s valuation of its stable cash flows.

To summarize, Hindustan Zinc has a unique position in India: it is the dominant zinc player with virtually no direct domestic competitor in zinc. Compared to broad “metal sector” peers, it has far higher profit margins, ROE, and dividend payouts, though it is less diversified. Its conservative balance sheet also contrasts with some peers that carry higher leverage (for example, Vedanta Ltd has a significant debt load, whereas HZL has minimal debt). These factors generally make HZL a lower-risk, cash-rich play within the sector, though it is also more singularly tied to one commodity (zinc) in terms of risk exposure.

Asian and Global Competitors

On the international stage (especially in Asia), Hindustan Zinc faces competition from global zinc producers and smelters. The global zinc market is dominated by a few large players and numerous mid-sized producers. HZL is a top-ranking player: it is the world’s second-largest zinc miner in terms of production (Hindustan Zinc - Wikipedia) and among the top zinc smelting companies. Its primary competitors globally include:

Glencore PLC (Switzerland/U.K.) – a diversified mining giant that is the world’s largest zinc producer, with mines across continents. Glencore produced over 1 million tonnes of zinc in concentrate in 2022, slightly more than HZL (Zinc: company ranking by production volume 2022 | Statista).
Teck Resources (Canada) – a major zinc miner (Red Dog mine in Alaska) and producer.
Nyrstar (Belgium, owned by Trafigura) – one of the largest zinc smelting companies with operations in Europe and Australia.
Korea Zinc Co. (South Korea) – the world’s largest zinc smelter, accounting for roughly 10% of global zinc output (Korea Zinc seeks 'core technology' designation in latest attempt to ...). Unlike HZL, Korea Zinc primarily refines zinc (650,000+ tonnes annual capacity) and lead from imported concentrates (Korea Zinc - Wikipedia).
Chinese zinc producers – China is the world’s largest zinc producing country (over 4 million tonnes per year), but its production is spread among many smelters and mining companies (often state-owned or private). Companies like Zhuzhou Smelter, Huludao Zinc, and Zijin Mining Group (which has zinc assets) are significant in volume. Individually, most Chinese companies produce less than HZL, but collectively China dominates the market (Shiny yields – the world’s biggest zinc producers).

Hindustan Zinc’s standing: HZL produces around 800,000+ tonnes of refined zinc annually ( Key Financial Information | Hindustan Zinc ), which is comparable to or higher than the output of any single Asian competitor. For example, Korea Zinc’s capacity (650kT Zn) is slightly lower in zinc metal terms (Korea Zinc - Wikipedia) (though Korea Zinc also has substantial lead and precious metals output). This makes Hindustan Zinc one of the leading players in Asia. It’s often cited that HZL is among the lowest-cost producers globally – the company reports being in the “1st decile” of the global zinc cost curve, meaning its production cost is lower than 90% of worldwide producers (). This gives it a competitive edge against international players, especially during periods of low zinc prices.

In the Asian market context, HZL’s competition is mostly indirect: since zinc is a globally traded commodity, HZL competes with international suppliers in terms of cost efficiency and the ability to secure markets. The company exports a portion of its production and also faces import competition in India (if imported zinc is cheaper). Major global traders (Trafigura, Glencore) and smelters in Asia set the benchmark which HZL must meet or beat on cost and quality. HZL has consistently done well on this front, as evidenced by its high margins compared to peers. For instance, Korea Zinc (as a smelter) operates on treatment charges and typically has thinner margins than HZL which earns full mining profit – HZL’s EBITDA margins (~55%) are much higher than those of pure smelting companies.

Another comparison is in diversification: many global peers are diversified (e.g., Glencore mines multiple commodities; Teck has coal and copper; Vedanta resources has oil, aluminum, etc.), whereas HZL is focused on zinc, lead, and silver. This focus has allowed HZL to excel in its niche, but it also means HZL’s fortunes are tied to zinc and lead price fluctuations. In contrast, a company like Korea Zinc by being a smelter can sometimes be less exposed to price (they earn processing fees), but they rely on raw material supply from mines (including potentially from HZL or Vedanta). Interestingly, Vedanta Group’s international zinc operations (through Vedanta Zinc International in South Africa/Namibia) are much smaller and higher cost than HZL, reinforcing that HZL is Vedanta’s crown jewel in terms of performance (Beneath The Surface: How Hindustan Zinc Grew To Become The World's Second Largest Zinc Producer - Forbes India).

In summary, Hindustan Zinc holds its own among Asian and global zinc majors. It is one of the top 2-3 producers worldwide by volume and likely one of the most profitable due to its integrated low-cost operations. Its key international competitor in Asia, Korea Zinc, is a dominant smelter but lacks HZL’s upstream mines. Chinese companies overshadow HZL in aggregate but individually are less efficient. This competitive landscape means HZL has a solid position – it can leverage its large scale and cost advantages to remain a leader. The company’s main challenge in competition is the global price volatility of zinc (an external factor) rather than losing market share to specific rivals. As long as HZL maintains cost leadership, it should remain a formidable player in Asia’s zinc market.

Charts and Tables: Financial Trends and Comparison

To visualize the financial trends and comparisons described, this section presents key data in structured tables (as seen above) and a comparative snapshot:

Revenue and Profit Trend: As shown in Figure 1 (below), Hindustan Zinc’s revenue climbed steadily from FY20 to FY23 before dipping in FY24, while net profits followed a similar trajectory. (Figure 1 is a conceptual line chart: imagine revenue rising to a peak in FY23 and a slight drop in FY24, with net profit margin narrowing in FY24 due to price effects.) In numerical terms, revenue grew at a ~21% CAGR from FY20 to FY23 and then fell ~15% in FY24 (HINDUSTAN ZINC LIMITED Investor Presentation April 2024). Net profit hit an all-time high in FY23 and then declined by ~26% in FY24 (Hindustan Zinc - Stock Price, Analysis, Financials & Key Insights | ScanX) (Hindustan Zinc - Stock Price, Analysis, Financials & Key Insights | ScanX).
Financial Metrics Table: Table 2 above summarized HZL’s key ratios. It highlights the spike in ROE in recent years (as equity reduced) and the declining current ratio. These trends are important for understanding the company’s financial strategy (high payouts leading to high ROE but low current assets).
Competitor Comparison Table: Below is a brief comparison of Hindustan Zinc with a few peers on select metrics (for FY2022-23 as a representative year):

Table 3: Hindustan Zinc vs Selected Peers (FY2022-23 figures)

Company (FY23)	Revenue (₹ Cr)	Net Profit (₹ Cr)	Net Profit Margin	ROE (%)	D/E Ratio (x)
Hindustan Zinc	34,098 ([

  Key Financial Information | Hindustan Zinc   ](https://www.hzlindia.com/investors/key-financial-information/#:~:text=Particulars%202023,18%2C561%2021%2C118%2022%2C082%2017%2C273%2014%2C181))    | 10,511 ([[BOM: 500188|NSE : HINDZINC] HINDUSTAN ZINC Financial Statement Analysis-Mar 06,2025](https://www.smart-investing.in/mainFinancials.php?Company=HINDUSTAN+ZINC+LTD#:~:text=Depreciation%20%E2%82%B93%2C264%20Cr%E2%82%B92%2C917%20Cr%E2%82%B92%2C531%20Cr%E2%82%B92%2C531,89))      | 30.8% ([[BOM: 500188|NSE : HINDZINC] HINDUSTAN ZINC Financial Statement Analysis-Mar 06,2025](https://www.smart-investing.in/mainFinancials.php?Company=HINDUSTAN+ZINC+LTD#:~:text=Consolidated%20Net%20Profit%20%E2%82%B910%2C511%20Cr%E2%82%B99%2C629,26.82%2030.83%2032.71%2035.26))    | 44.5% ([[BOM: 500188|NSE : HINDZINC] HINDUSTAN ZINC Financial Statement Analysis-Mar 06,2025](https://www.smart-investing.in/mainFinancials.php?Company=HINDUSTAN+ZINC+LTD#:~:text=Earnings%20Per%20Share%20%28Rs%29%E2%82%B918,22))  | 0.94 ([[BOM: 500188|NSE : HINDZINC] HINDUSTAN ZINC Financial Statement Analysis-Mar 06,2025](https://www.smart-investing.in/mainFinancials.php?Company=HINDUSTAN+ZINC+LTD#:~:text=PAT%20Margin%20%28,22))  |

| Hindalco Industries * | 55,750 (India ops) | 3,400 (India ops) | ~6% (consol ~5%) | ~10-12% (est.) | 0.80 (consol est.) | | Vedanta Ltd (Consol) | 131,192 | 17,245 | 13.1% (consol) | ~20% | 0.98 | | Hindustan Copper | 1,812 | 373 | 20.6% | 11.5% | 0.45 |

Notes: Data for peers are approximate. Hindalco’s standalone (India) business is shown for revenue/profit (its consolidated revenue is much higher but low margin). Vedanta’s numbers from its FY23 annual report (Vedanta is diversified). Hindustan Copper is much smaller. Sources include company annual reports and financial databases.

In Table 3, we see HZL’s net profit margin (30.8%) far exceeds that of Hindalco (~5-6%) and Vedanta (~13%). HZL’s ROE is also highest. Vedanta and Hindalco have much larger revenues, but that comes with lower margins and higher leverage. This comparison underlines Hindustan Zinc’s strength in its segment – it converts a larger share of revenue to profit and rewards shareholders more generously.

(No explicit chart images are included due to text format, but the tables and descriptions serve to illustrate the financial trend lines and comparisons.)

Insights and Conclusions

Financial Strength and Profitability: Hindustan Zinc is in a very strong financial position, characterized by exceptional profitability and efficient operations. Over the past five years, the company has consistently delivered high earnings and cash flows, with EBITDA margins around 55% and PAT margins around 30%. It has outperformed most peers on key metrics and established itself as a cash cow. Even when zinc prices softened (as in FY24), HZL remained solidly profitable with PAT near ₹7,800 crore (), showcasing resilience. The company’s strategy of returning surplus cash to shareholders has led to a leaner balance sheet (lower equity and cash), but this has in turn boosted return ratios (ROE above 50%). Solvency is not a concern – debt levels are low relative to earnings, and interest coverage is very high. One point to monitor is short-term liquidity, which appears low on paper; however, given the company’s cash-generating ability and backing by a large parent, liquidity risk is minimal. Overall, HZL’s financial position can be described as robust and efficiently optimized – minimal idle capital, low debt, and high returns.

Growth Trajectory: In terms of growth, Hindustan Zinc’s volumes have been increasing moderately (mined metal output has grown year by year, e.g. mined zinc from ~720k tonnes in FY20 to 855k tonnes in FY24 ( Key Financial Information | Hindustan Zinc )). The company has been investing in mine expansions and is aiming for significant growth in the coming years. According to recent announcements, HZL plans to double its metal production capacity to 2 million tonnes per annum by 2029-30 (from ~1.1 MTPA currently) (Hindustan Zinc - Stock Price, Analysis, Financials & Key Insights | ScanX). This would be a transformative increase, indicating an ambitious growth trajectory. The expansion involves developing new mines and upgrading smelters, as well as diversifying into “critical minerals” (HZL has shown interest in mining opportunities for minerals like zinc’s co-products or others that India needs) (Hindustan Zinc - Stock Price, Analysis, Financials & Key Insights | ScanX). Successfully executing this plan would further reinforce HZL’s dominance and could propel revenue and earnings to much higher levels over the next decade. It’s noteworthy that HZL has the resource base (reserves of zinc-lead) to support increased output, and its cost structure could improve with economies of scale. Thus, the growth outlook for Hindustan Zinc is positive, though subject to commodity demand and prices remaining supportive.

Market Standing: In the market, Hindustan Zinc holds a unique standing. Domestically, it is virtually unchallenged in its segment, which affords it pricing power and stable domestic demand (for instance, zinc consumption in India is growing due to infrastructure and automotive needs for galvanized steel). Globally, HZL is respected as a low-cost, high-volume producer – it is a price taker in the global market, yet it can remain profitable even when prices are down, which not all competitors can claim. The company’s cost leadership and product quality (Special High Grade zinc, etc.) make it competitive for exports. Investors often view HZL as a defensive metal stock due to its consistent dividends and strong margins. On the sustainability and safety front, HZL has also earned recognition (ranked first globally in Dow Jones sustainability index for metals and mining) (), enhancing its reputation.

Key Takeaways:

Hindustan Zinc has delivered strong financial performance in the last five years, with peak revenue and profit in FY22-FY23 driven by high zinc prices and record production. The slight downturn in FY24 was due to external price factors, not operational issues (HINDUSTAN ZINC LIMITED Investor Presentation April 2024).
The company’s profitability ratios are outstanding – it converts a large portion of revenue to profit (30%+ net margins) and generates high returns on capital. This is underpinned by its integrated low-cost operations in zinc-lead-silver.
HZL’s financial strategy has been shareholder-friendly, distributing large dividends. This has resulted in a slimmer balance sheet and some debt uptake, but financial risk remains low. Debt is modest and well-covered, while cash flow generation is strong enough to sustain both operations and payouts.
Compared to competitors, Hindustan Zinc stands at the top in margin and efficiency. It lacks diversification, but in its domain it is a leader. Indian peers do not match its financial metrics, and even global peers find it hard to compete with HZL’s cost structure.
Looking ahead, HZL is poised for further growth – expansion plans could increase volumes significantly, which may drive future revenue growth if executed as planned (Hindustan Zinc - Stock Price, Analysis, Financials & Key Insights | ScanX). The main external factor is zinc price volatility; a sustained low-price environment is the biggest earnings risk. Nonetheless, HZL has the resilience (low cost, strong balance sheet) to navigate downturns better than most.
In conclusion, Hindustan Zinc presents a picture of a financially solid, highly profitable company with a dominant market position. Its prudent management of operations and capital has yielded excellent returns. With its ongoing expansion and backing from a major resources group, HZL is likely to remain a key player in the global zinc industry, maintaining its growth trajectory and market standing in the years to come.

( Key Financial Information | Hindustan Zinc ) ([BOM: 500188|NSE : HINDZINC] HINDUSTAN ZINC Financial Statement Analysis-Mar 06,2025)

Hindustan Zinc Limited (HINDZINC) is a prominent player in the Indian mining industry, primarily engaged in the extraction and processing of zinc, lead, and silver. Below is an analysis of its key financial metrics, valuation, dividend policy, growth trends, profitability ratios, and debt levels over the past five years.

1. Earnings Per Share (EPS) and Price-to-Earnings (P/E) Ratio:

Latest EPS: As of the trailing twelve months (TTM) ending December 2024, Hindustan Zinc's EPS stands at ₹22.22. citeturn0search1
Current P/E Ratio: Based on the share price of ₹408.80 as of February 19, 2025, the P/E ratio is 18.40. citeturn0search1

2. Historical P/E Ratio Comparison:

Over the past five years, Hindustan Zinc's P/E ratio has fluctuated as follows:

2020: 14.8
2021: 14.6
2022: 13.5
2023: Approximately 15.91
2024: Approximately 18.40

This indicates a rising trend in the P/E ratio over the recent years. citeturn0search9

3. Industry Average P/E Ratio:

The Metals & Mining industry's median P/E ratio is approximately 16.67, positioning Hindustan Zinc's current P/E slightly above the industry average. citeturn0search1

4. Intrinsic Value Estimation (Discounted Cash Flow Method):

Estimations of Hindustan Zinc's intrinsic value using the Discounted Cash Flow (DCF) method vary:

Smart-Investing: As of February 28, 2025, the intrinsic value is estimated at ₹360.88. citeturn0search2
ValueInvesting.io: As of March 3, 2025, the intrinsic value is calculated at ₹201.26, suggesting the stock is overvalued by approximately 48.50% based on the current market price of ₹390.80. citeturn0search15

5. Dividend Yield and Payout Ratio:

Dividend Yield: The TTM dividend yield is 7.47%. citeturn0search16
Dividend Payout Ratio: The payout ratio has experienced significant fluctuations, with a notable decrease from 303.82% in FY2023 to 70.88% in FY2024. citeturn0search18

6. Revenue and Profit Growth Trend (Past 5 Years):

Hindustan Zinc's revenue and net profit over the past five fiscal years are as follows:

Fiscal Year	Revenue (₹ Crore)	Net Profit (₹ Crore)
2020	18,591	6,805
2021	22,068	9,634
2022	29,440	10,443
2023	28,740	10,511
2024	27,831	9,059

This data indicates a revenue growth from FY2020 to FY2022, followed by a slight decline in the subsequent years. Net profit peaked in FY2022 and has since decreased. citeturn0search18

7. Return on Equity (ROE) and Return on Assets (ROA):

ROE: There has been a decline from 81.28% in FY2020 to 16.88% in FY2024.
ROA: Similarly, ROA decreased from 29.67% in FY2020 to 14.48% in FY2024.

These trends suggest a reduction in the company's profitability over the analyzed period. citeturn0search0

8. Debt-to-Equity Ratio Trend:

The debt-to-equity ratio has varied over the past five years:

2020: 0.91
2021: 0.08
2022: 0.20
2023: 0.02
2024: 0.40

This indicates a significant reduction in debt levels from FY2020 to FY2023, with an uptick in FY2024. citeturn0search0

9. Fundamental Strength Assessment:

While Hindustan Zinc has maintained robust dividend payouts and a reasonable P/E ratio, the declining trends in revenue, net profit, ROE, and ROA, coupled with fluctuating debt levels, suggest potential challenges in sustaining its historical growth and profitability. Investors should consider these factors alongside industry conditions and company strategies when evaluating the stock's fundamental strength.

Note: All financial figures are sourced from the provided search results and are subject to verification from official company filings.

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