Hindustan Zinc to be Debt-Free by FY'26: Report

New Delhi, Jan 26 (PTI) Vedanta group firm Hindustan Zinc Ltd (HZL) is likely to turn net debt-free by the next financial year despite significant investment in capacity expansion, according to a report.

According to brokerage firm Ventura Securities global demand for base metals -- zinc and lead, is expected to grow at a CAGR of 6/7 per cent... Domestically, India is a net exporter of zinc while having a deficit in lead supplies. Both these circumstances are favourable to HZL.

"HZL is expected to turn net debt-free by FY26," it said.

The country's largest producer of zinc, lead and silver had earlier said that it expects to reduce its debt to about Rs 2,000 crore by March-end from about Rs 6,000 crore at the end of the September quarter.

Silver is fast gaining traction for investment demand and its use cases in industrial applications is only rising. The timely expansion in silver production capacities augers well given the exploding demand, the report said.

HZL has planned capacity expansion of Rs 16,000 crore, including sustaining capex, for the period FY 24-27 for funding the roaster plant in Rajasthan's Debari, fumer and fertilizer plant at Chanderiya (sulphuric acid forward integration), in the desert state and 450 mw renewable energy addition.

The brokerage firm said that it is also bullish on HZL's expansion plans, expecting it to contribute to revenue growth.

"HZL is expected to expand its mined production to 1.2 million tonnes in FY27 from 1 million tonnes with refined zinc/lead production increasing from 817/216 kt to 931/240 kt. Silver (by product of lead concentrate) is expected to increase from 746 to 800 tonnes," the report said.

Hindustan Zinc, it said, is likely to benefit from power cost savings and operating leverage that will push the profit after tax at the company to Rs 11,402 crore by FY27.