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The market expects much less from Hindustan Zinc than it has delivered before.
At today’s share price, buyers are assuming Hindustan Zinc grows about 4% a year, forever. Over the last ten years it actually grew about 12% a year. That is a big step down from its own record. Either the market can see a problem that the published accounts do not show yet, or it is expecting a slowdown that has not happened.
- How it is valued: Discounted cash flow.
- What the price assumes: 4% growth, against 12% the model takes from its own record.
- Ten-year record: Between FY2018 and FY2026, Hindustan Zinc's revenue went from ₹22,521 crore to ₹40,844 crore — it compounded at about 8% a year over 8 years.
- Biggest swing factor: Zinc prices. Main risk: Metal price falls.
01Low-cost mines in Rajasthan
Hindustan Zinc, majority-owned by Vedanta with the Government of India as a large minority shareholder, mines and smelts zinc and lead in Rajasthan, including the Rampura Agucha mine. It is one of the world's largest integrated zinc producers.
Silver comes out of the same ore and has become a big part of profit. Low costs and high margins let it pay very large dividends.
02What the market is assuming
Work backwards from today's share price and you can see what buyers are quietly taking for granted. Here is the growth that price implies for Hindustan Zinc, next to what the model assumes from the company's own record.
The further apart these two numbers are, the bigger the bet a buyer at today's price is making.
03Hindustan Zinc's record, in plain numbers
Between FY2018 and FY2026, Hindustan Zinc's revenue went from ₹22,521 crore to ₹40,844 crore — it compounded at about 8% a year over 8 years. Net profit grew from ₹9,276 crore to ₹13,832 crore, about 5% a year — slower than revenue, so margins narrowed. In FY2026 it kept 33.9% of revenue as net profit — against a low of 26.8% in FY2024 and a high of 41.2% in FY2018. The latest year added 19.8% to revenue, well ahead of its own long-run pace.
Revenue and earnings per share in ₹, return on equity and leverage as ratios — all from the filed statements.
Revenue and net profit by year (₹ crore)
| Year | Revenue | Net profit | Margin |
|---|---|---|---|
| FY2018 | 22,521 | 9,276 | 41.2% |
| FY2019 | 21,118 | 7,956 | 37.7% |
| FY2020 | 18,561 | 6,805 | 36.7% |
| FY2021 | 22,629 | 7,980 | 35.3% |
| FY2022 | 29,440 | 9,629 | 32.7% |
| FY2023 | 33,272 | 10,511 | 31.6% |
| FY2024 | 28,932 | 7,759 | 26.8% |
| FY2025 | 34,083 | 10,353 | 30.4% |
| FY2026 | 40,844 | 13,832 | 33.9% |
04How Hindustan Zinc gets valued — and why
Discounted cash flowThis business is valued on the cash it is expected to generate, discounted back at its cost of capital — with growth taken from its own ten-year record rather than from guidance.
05What decides Hindustan Zinc's value
Zinc prices
Global zinc prices drive most of the profit.
Silver prices
Silver adds a growing share of earnings.
Low costs
Its mines are among the cheapest in the world.
Expansion
Plans to raise output would add volume.
06What could go wrong
- Metal price falls. Weaker zinc or silver prices cut profit.
- Parent's needs. Vedanta's appetite for dividends shapes payouts.
- Mine depletion. Ore grades and reserves must be replenished.
07What the full Hindustan Zinc valuation shows
Sign in free to see the complete Hindustan Zinc valuation
- ✓Fair value per share — from a ten-year discounted cash flow, every step shown
- ✓The Workbench — change revenue growth, the discount rate or terminal growth and watch Hindustan Zinc's value move
- ✓Bull, base and bear cases — and exactly which assumptions move between them
- ✓Peer comparison — against Vedanta, Hindalco and other metals companies
- ✓Downloadable report — the full write-up, yours to keep
08Questions people ask about Hindustan Zinc
Who owns Hindustan Zinc?
Vedanta holds the majority; the government owns a large minority stake.
Why does silver matter to Hindustan Zinc?
Its ore contains silver, which has become a big part of profit.
Why are Hindustan Zinc's dividends so large?
Low costs generate lots of cash, and its parent relies on the dividends.
Is Hindustan Zinc overvalued?
At ₹555 the market is pricing in roughly 4% sustained growth, against the ~12% its own record supports. That is less than it has delivered — on these numbers the market is asking the business for less than its own record, which usually means it doubts the record repeats.
What is the intrinsic value of Hindustan Zinc?
It is computed from the filed financial statements using the method that fits this business (discounted cash flow), with every assumption shown alongside the result. The per-share figure and the full working are in the report.
How much debt does Hindustan Zinc carry?
Debt to equity stands at 0.21, against 0.13 at the start of the period — the balance sheet is a core input to the cost of capital used here.