Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Hindustan Zinc Ltd (NSE: HINDZINC) Q4 2026 Earnings Call dated Apr. 24, 2026
Corporate Participants:
Raksha Jain — Director of Investor Relations
Arun Misra — Chief Executive Officer & Whole Time Director
Sandeep Modi — Deputy Chief Financial Officer
Analysts:
Manav Gogia — Analyst
Pallav Agarwal — Analyst
Ashish Kejriwal — Analyst
Unidentified Participant
Pinakin Parekh — Analyst
Sumangal Nevatia — Analyst
Raashi Chopra — Analyst
Vikash Singh — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, Good day and welcome to the fourth quarter and full year FY26 earnings conference call hosted by Hindustan Zinc. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone pole. I now hand the conference over to Ms. Raksha Jain, Director of Investor Relations of Hindustan Zinc.
Thank you Anne. Over to you.
Raksha Jain — Director of Investor Relations
Thank you operator. And good evening ladies and gentlemen. Thank you for joining us today to discuss the fourth quarter and full year FY26 results. In this call he will refer to our investor presentation available on our company’s website. Please note that today’s entire discussion will be covered by the Safe harbor cross mentioned on slide 2 of the presentation. Today we have Mr. Arun Mishra, our CEO and Mr. Sandeep Modi, our CFO. The management will be discussing the operational and financial updates for the quarter followed by a Q and A session.
Now I would like to invite Mr. Arun Mishra to present the results. Over to you sir.
Arun Misra — Chief Executive Officer & Whole Time Director
Thank you Raksha. A very good evening to all of you. Thank you for joining us today. Before we begin, it is with deep sorrow that I share an unfortunate incident at our Jawar Mines on 25th of January 2026 wherein we lost an employee of our business partner due to an unexpected man measured interaction. I extend my deepest condolences to the bereaved family and stand with them in this moment of profound grief. We have provided them our unwavering support during this difficult time. Such incidents are deeply distressing and reinforce the critical importance of fostering a strong safety first culture across our organization.
Something we continuously strive to strengthen. Following a thorough investigation, we are committed to disseminating learnings across the organization while implementing corrective measures and strengthening safety protocols to prevent such tragedies in future. As part of our efforts to prevent such interactions through digitalization, we have launched a collision avoidance system at our Sindh Sirkud mine covering underground equipment and personnel. We believe this initiative, along with other safety interventions during this year will further strengthen our journey towards achieving our goal of zero harm.
This year we set a new milestone by crossing 1.1 million tons of mined metal while sustaining over 1 million ton of refined metal production for the fourth consecutive year. This performance was further reinforced by a record breaking fourth quarter with highest ever mined and refined metal production. We also achieved record ore resources and reserves of 468.6 million tons with 25 years plus of mining life and recorded highest ever metal reserves of of around 14 million tons and highest ever silver reserve of 10.9 thousand tonnes since underground transition on our journey to becoming a multi metal enterprise we have secured three critical mineral blocks potash, tungsten and rare earths.
We have established clear timeline with work now underway. Further details are available on slide 11 of the presentation. On sustainability front, I would like to share that Hindustan Zinc has been Featured in the top 1% of the S and P Global Sustainability Yearbook for the ninth consecutive year. Reflecting our strong commitment to sustainability and ESG leadership. We remain focused on our 2030 goals with progress across key areas, 18% renewable energy consumption, deployment of 180 LNG and 52 electric vehicles, improved water management, reduced waste to landfill and enhanced gender diversity.
Further, I am proud to share a landmark achievement. Our Chandariya led Zinc Mentor has become India’s first site to receive the Zinc Mark and Copper Mark certification, a testament to our commitment to responsible resource use, lower environmental impact and industry leading standards. Our CSR initiatives and reached over 2.6 million lives across our 4,000 villages, with Nandgarh in Rajasthan nearly doubling to 9,274. We remain committed to inclusive growth through focused moving to the market development.
India continues to remain a standout among major economies with manufacturing PMI sustaining strong momentum above 55 levels during the year. The country’s GDP growth for FY 2027 is expected to remain resilient at around 6.4 to 6.9%, supported by continued government capex, infrastructure push and robust domestic consumption. Against a volatile global macroeconomic backdrop, base metal markets have remained relatively resilient during the quarter. Zinc prices touched a high of 3. $3,487 per tonne with an average of $3,241 per tonne while lead peaked at $2,040 per tonne averaging at $1,931 per tonne.
This performance reflects tight market conditions and steady demand from infrastructure, galvanization and battery segments. Silver however continues to stand out, maintaining strong momentum supported by robust industrial demand, particularly from solar and electronics alongside continued investor interest. While prices have normalized from peak levels, the medium term outlook remains constructive driven by structural demand from energy transition and limited supply growth. Turning to operational performance, we delivered a record breaking quarter with mine metal production at 315kt and refined metal production of 282kt.
This led to historic full year performance with mined metal at 1.1 million tonnes and second highest refined metal of 1,048 kilotons. The growth was driven by higher ore production and improved mined metal grades. On the refined metal side, output was supported by debottlenecking at Chandaria and Dariba, improved plant utilization and enhanced operational efficiencies and resulting in higher throughput and better asset performance. On the cost front, despite a volatile geopolitical environment, we achieved the lowest quarterly zinc cost of production excluding royalty since underground transition at $903 per ton reflecting a decline of 9% year on year and 4% quarter on quarter.
The reduction was driven by a combination of factors lower power cost improved by product realization and operating leverage benefits from increased volumes. On a full year basis we delivered a five year low cost of production at $959 per ton, well below our guidance of $1,000 per ton. This underscores the structural strength of our cost base and reinforces our position on the global cost curve. Our quarterly silver Production stood at 176 tonnes, up 11% sequentially. For the full year silver production stood at 627 tonnes.
Impacted by change in mining sequence supported by strong silver prices, our precious metal portfolio achieved a Milestone performance contributing 45% to the overall profitability. Further, to capitalize on the favorable price environment and optimize inventory, we strategically sold 12,000 tons of lead concentrate during the quarter including similar actions in the previous quarter. Total silver equivalent sales amounted to 37 tonnes, effectively enhancing overall silver contribution towards the financial performance.
This combination of lowest cost of production, strong output and commodity tailwinds translated into all time high financial performance both the quarter and full year. During the quarter we delivered record revenue for 13,544 crores, highest ever EBITDA of rupees 7,747 crore and record net profit of 5,033 crore marking a new milestone for the company. On the growth projects front, we are making steady Progress for the 250,000 tonnes per annum integrated zinc smelter at Debary site mobilization is complete and detailed engineering is largely finalized.
At Rampur Agucha site work for the tailings reprocessing plant has commenced with engineering completed. In parallel, we are accelerating exploration for our 2x growth plans with partners onboarded at Javar and Raspora de River. On technology led initiatives, we are advancing the hot asset leaching process to unlock additional value for smelting waste through recovery of additional lead and silver. Given its complexity As a first of its kind project in India, commissioning is now expected in quarter two of FY27.
The fertilizer project is also on track for commissioning in early quarter two FY27 looking into the year ahead with a well structured CAPEX roadmap in place, we are confident in sustaining this strong performance in the year ahead. With an expected mined metal production of 1150kW plus or minus 10 kilotons and a refined metal production of 1100kW plus or minus 10kt. With an expected refined silver production of 680 tonnes plus or minus 10 tons, Henderson Zinc is entering a defining phase of its growth anchored in scale, cost leadership and a relentless focus on excellence.
With a strong balance sheet and a clear strategic roadmap, we are poised to invest decisively, expand our resource base and unlock new avenues of growth. As the world accelerates towards electrification, decarbonization and energy security, we see a generational opportunity for metals. Our ambition is not only to participate in this transformation but to lead it by building future ready capabilities, advancing sustainability and delivering consistent long term value. With this I now hand over to SANDEEP for an update on the financial performance.
Sandeep Modi — Deputy Chief Financial Officer
Thank you Mr. Mishra and good evening everyone. The global macro environment continues to be marked by uneven growth and geopolitical volatility. In contrast, India remains relatively resilient with FY26 GDP growth estimated at around 7.6% moderating to 6.4 to 6.9% in FY27 supported by strong domestic demand infrastructure led capex and political continuity. Commodity markets remain sensitive in the near term. However, underlying metal fundamentals are increasingly constructive with energy transition accelerating zinc and silver demand structurally.
While zinc demand remains stable supported by galvanization, lead continues to witness steady battery driven demand and silver standout structurally with strong demand from solar and electronics driving a sustained deficit. These fundamentals provide support to current price levels. Against this backdrop, our focus on cost leadership, operational excellence and balance sheet strengthen the position us well for sustained value creation. Turning to the performance, both the quarter and the full year mark milestone achievements.
For the first time we have crossed 40,000 crore in the revenue and 20,000 crore in EBITDA for the full year. This year’s record volume and lower level costs undermine our margin resilience showcasing our structured cost leadership, silver led profitability, upside and disciplined growth capex which position us well for sustained value creation across cycles. In Q4 FY26 we delivered our highest ever quarterly revenue of 13,544 crore up 49% YoY and 23% quarter on quarter driven by higher production, a supportive commodity environment improved by product realization and rupee depreciation.
Quarterly EBITDA stood at record 7747 crore up 61% YoY and 27% quarter on quarter with industry leading EBITDA margin of 57% by. This performance was supported by higher revenue and the lowest ever quarterly zinc cost of production since underground transition at $900.3per ton. Key drivers included higher domestic coal uses at 64%, softened coal prices of imported 1, higher production and strong byproduct realization along with the better mine grades. Reflecting this strong operating performance, we delivered our highest ever quarterly net profit of 5033 crore up 60%, 68% YoY and 29% quarter on quarter.
For the full year we achieved record revenue of 40,844 crore, EBITDA of 22,162 crore and a net profit of 13,832 crore. Zinc cost of production for the FY26 stood at 959 per ton, the lowest in last five years and well below our guided range. Free cash flow before growth. Capex and renewable investment for the year was 13,337 crore. For FY27 we have guided zinc cost of production excluding royalty at $975 to $1,000 per ton reflecting prevailing global uncertainties. Planned Capital expenditure for FY27 is in the range of $500 to $600 billion toward announced growth projects.
Our strong cash generation enabled us to close the year with a net cash position of 5594 crores as of March 26 compared to a net debt position of 1169 crore at the close of the last year. Our gross cash position is around 14,000 crores as at March 26. During FY26 we also contributed around 19,000 crore to national exchequer including more than 6,000 crore to the state of Rajasthan. Underscoring our role as a significant contributor to the economy and the state, we also made meaningful progress in long term value creation during the year.
Hindustan was included in the Nifty 100, Nifty Next 50 and multiple Nifty ESG indices. We now rank among the top five Nifty metal companies are among the top companies in the Nifty 100. Our market capitalization stood at approximately 2 12,000 crore at the end of March 26 and we touched a peak market cap of 3 10,000 crores during the year. Overall Q4 reflects the strength of our business model and execution. While FY26 marks a milestone year setting new benchmark across financial and operational matrices.
Backed by technology, innovation and strong sustainability framework. We remain well aligned with India’s growth and energy transition priorities and are confident of delivering resilient growth and long term value for all stakeholders. With this I will now hand over to the operator for the Q and A session. Thank you.
Questions and Answers:
Operator
Thank you very much sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We’ll take our first question from the line of Manav Gogia from. Yes, securities India Ltd. Please go ahead.
Manav Gogia
Yeah, hello. Am I audible?
Operator
Yes Mano, please go ahead.
Manav Gogia
Yes, very good evening and thank you for the opportunity. So first of all congratulations on the good set of numbers. My first question comes around. Would it be possible for you to give me what the hedge quantity across Lincoln silver would be for both Q1 27 and the whole year of FY27
Sandeep Modi
For the Q1 for the gene cap is a held at 20kt spread between the April to June at a average price of $3,100 and silver is 25 ton at a average price of $57 for the full year FY27.71kt is at an average price of $3,225 per ton. And silver is haze at 59 tons at an average price of $50 per triangle.
Manav Gogia
Okay, okay, got it. And just you know continuing on this, I mean for silver, you know the presentation states that we plan to take the capacity is up to 830kt. Sorry 830 tons by 2029 and this year the run rate has been roughly 620 to 630. So how should we see the Runway from here onwards? Could you, could you give us some brief about that?
Arun Misra
No Manu, this will also come along with the expansion of immediately 250kt smelter that we are adding. Right. So when that 250 kilot smelter is added so that will come to about 1.1 plus point point 1.35 1.4 million ton of metal. And for that the mic would be about 1.5 1.55 million ton of micro automatically that gives Additional lead which will focus. That is number one. Number two, we are commissioning the LGLC circuit which will produce additional silver. We will be having the new smelter along with its own fumer that will also add the silver.
Plus by that time some amount of tailing recycling will also come back altogether. If you look, it will be crossing 800 tons of silver by that time.
Manav Gogia
Okay, but I mean you know during Q4 we did round about 176 tons for silver. Would it be, you know, safe to assume that we can maintain this run rate going ahead in Q1, Q2 and you know, for the remaining part of FY27 then.
Arun Misra
So as of now our guidance wise we have given 680 tons for the entire year. Right? So we’ll follow the similar pattern, only 680 tons. And if you consider last year we did the mic sale in which 37 tons of silver equivalent was there. That 37. If you add to 627 we have already at 664 level. Right. Compared to that we have only given a guidance of 680. We have got MIT in our hand. And if and if the lead metal prices fall while zinc prices are up which happened last year, then we’ll tilt our production towards more of zinc, less of lead.
And we will sell the lead MIC which is made surplus this way and then produce silver, whatever is possible through the zinc maximization route. At the same time the recover silver through the lead MIT cells.
Manav Gogia
Okay, okay. No that is helpful. So my second question comes. You know there’s a 35% sequential jump in other other expenses. What were the key reasons behind the same.
Sandeep Modi
So mana I will address this. HL has a. So you will see the similar jump in other operating income as well. Okay, so I will address the both parts. So hidden has entered into the various agreement with the. We have set up the various ancillary business. So the ancillary business are basically with the third party where we provide them smelters residue which they convert from waste to wealth. So as per this arrangement, arrangement saves the smelter residue which is like a PFK which contains the zinc and cadmium and then after that it is also purchased by back the finished goods or the WIP which then used by Hindustan Jing in the other smelting processes or mining processes.
So that’s why as per the accounting the transition is accounted when the sale happen as other operating income and when the purchase happen it is a part of the other expenditures and the amount is both sides.
Manav Gogia
Pardon. I could not get the number. So
Sandeep Modi
We’ll see on the around 6600 crore both side other operating income as well as other expendit for the full year.
Manav Gogia
Okay, okay. And do we expect to continue this trend going forward then? I mean the agreement.
Sandeep Modi
Yeah this trend will continue to increase and you will see the 600 crore going up to maybe 1200-1500 crore annually in the both side other operating income and other expenditures.
Manav Gogia
Oh okay. Okay. Got it. Sure. I mean I have more questions. I’ll join back to kill. Thank you so much.
Sandeep Modi
Thank you.
Operator
Thank you. Next question is from the line of Pallav Agarwal from Antique stock broking. Please go ahead.
Pallav Agarwal
Yeah. Good evening sir. Congratulations on the good set of numbers. So first question was on the cop. So you know the quarter for cost was pretty low at $900 per ton but for the full year we are giving a guidance of about 975 to thousand dollars. So will there be such a you know steep increase or will we see $975 in Q1 or that will be more towards the second half of the year.
Sandeep Modi
So Pandav I will let us here. So see the cost of Q4 it has been a significant benefit coming on account of the mining grid. So we had a mining grade of 7.9% in the Q4 and compared to the full year average of around 7.5%. And the extent point 10 bits of the mining grade impacts the $7. So I think Q1 historically we have been around 7.3 7.4% that should be there. Of course we don’t give guidance quarter wise at the same time. Secondly the current geopolitical environment where you see the input cost commodity coming impact of the diesel, propane gas, chemical explosive.
So I think we need to factor those also on a year basis. So maybe we don’t know about the word certain uncertainty but we have factored certain portion of it that put together. I think $975 to $1,000 is good enough. I’m sure we should be able to do much below then as the situation improves.
Pallav Agarwal
Sure sir. And also have you seen any impact, I mean of this shortage of natural gas? Has it impacted our production in any aspect or led to higher costs in Q4?
Sandeep Modi
It is a marginally higher cost in the Q4 maybe around $11 per tonne but on the production point of view no impact.
Pallav Agarwal
And lastly if we just give you know the RE proportion of RE consumption 26 and you know how much will that increase in 27
Sandeep Modi
So FY26 we close for the full year around 18% renewable energy. And for the full year in FY27 we should be between 30 to 35%.
Pallav Agarwal
Sure sir. Okay, thank you. I’ll join the club.
Operator
Thank you. Next question is from the line of Ashish Kejriwal from Nuwama Wealth Management. Please go ahead.
Ashish Kejriwal
Yeah. Hi, Good evening everyone. Thank you for the opportunity and again many congratulations. So two things from my side. One, obviously the cost of production which we have seen sharp fall the byproduct credits could have helped a big way. Because we are seeing in the top line also revenue of others increased from 783 crore to 1362 crore in this quarter for fourth quarter. So my only question is how much one can contribute or work to the higher sulphuric acid prices or the benefits of that in terms of our cost of production.
Sandeep Modi
So Ashish sulfuric acid prices are basically a division of communication of many things. One is the government also has their own control for the fertilizer. Second are linked with the sulfur index. So by and large you can consider depending upon the sulfur index the prices would be. So the way input commodity prices are moving similar way the this prices are also moving. So I think whatever we have seen in Q4 and we see the stable thing in the April as well. So I think whatever we have seen in the March should continue until the this situation is there for the input commodity.
So that is more like offsetting for us. So if the input commodity increases this prices increases and then we get offsets.
Unidentified Participant
So in this. Yes,
Arun Misra
I just wanted to add look at it positively in the guidance. When we move from 1048 KT metal to 1100 K metal that means much more acid, more residues will be available to us. So this is effort is sustainable and going forward the volumes are only increasing. So this other income going up and up every year unless the prices come we see a good, good prospect of sustaining this kind of an earning.
Ashish Kejriwal
Yeah, I agree sir. That’s the reason I was asking. No, you know, in terms of. In a per term basis or something. If you can guide, you know how much it could be which can be sustainable in nature.
Sandeep Modi
Yeah, I think we should leave it to the index. I don’t think we can quantify. Only you
Arun Misra
Can make a guess that quantities of material will keep on increasing along with the increase in more mind metal and more.
Ashish Kejriwal
Okay, Second question is on account of the next phase of expansion. We earlier said that now in the first phase we are increasing capacity by 250,000 tons. And obviously you have been giving us updates each quarter. But what is missing is the second phase which we discussed also when you announced that you are saying that, you know, in our next six months we will come out with the next phase of expansion plan also. So where we are or do we think that first we will complete this and then only we’ll start or how to take it forward?
Arun Misra
No, we are absolutely on the job. See the change which has happened is earlier we were thinking we will make two or three different smelters in different locations. Then we had an idea. Instead of doing that, why not bring everything together in one place. Then we reworked the whole plan and now the designers have confirmed that in one location about 600, 700 KTPS melter can be put. We plan to do that where we are putting the 250 kilo smelter. That means in one location, 1 million ton smelter will come up.
So that design has been finalized. Now the commercial process is going on. I see that another one month’s time we should be able to place the order. And now last two months we are focusing on the mill portion because we have already placed order for mining. Now the meals have to be expanded. I think mills order will also close sometime between the first week of June or second week of June. So although we wanted to clear out all the orders by January of this year, but we are late. But it is worth it because putting everything together in one place will reduce the cost of the project also.
Ashish Kejriwal
And where we are putting sir? Rajasthan only or somewhere else?
Arun Misra
All Rajasthan only. And we want to make it in the similar distances because we don’t want to carry concentrate on far distance.
Ashish Kejriwal
Understood. And so lastly, obviously when we are very much keen on putting up this kind of smelter or capex, I’m sure that we have been given a sense from the government about the mines which is going to be renewed or expired in 2013. So we are very much comfortable on that. That’s right.
Arun Misra
No, we are comfortable because we have the first right of refusal. So in any case we it’s only a matter of how much premium we are ready to pay. But just by bidding cannot take it away.
Ashish Kejriwal
Okay, thank you sir. And all the best.
Arun Misra
Thank you.
Operator
Thank you. Next question is from the line of Pinakin from hsbc. Please go ahead.
Pinakin Parekh
Yeah, thank you very much. So my first question on the silver production guidance, it looked a bit underwhelming. So just trying to understand that when can we see silver production spike up sharply, you know, 700, 725 states production to remain in this range 7680 for the next 50 years only.
Arun Misra
I will give you the clue that can happen when the zinc prices fall to say 2,800 to $3,000 per ton. If the zinc prices fall then and silver remains at say $60 at ryhounds it will make much sense to produce more lead and silver than production of zinc. And when we do that then we’ll surely see the numbers going up to 700 tons plus.
Pinakin Parekh
Okay, so just trying to understand that as a company we cannot have higher silver prices and higher silver production. They are mutually exclusive.
Arun Misra
No, it’s. See ultimately our mindset we our grades which we are proud of and we determine the cost is the grade of zinc. So it’s a more zinc zinc rich or. And when the zinc LME is so good say 3100, 200 on an average you are picking up to 3400. If you put the volumes it is better than producing 30 tons additional silver. If I put 30,000 tons of additional zinc it brings me more money.
Pinakin Parekh
Got it. My second question is on the dividend payouts. It’s a bit surprising that you know the quarter has just started and we have declared an S27 dividend. So what is the thought process behind this? And also the brand fee slash royalty fee have been paid out to the parent for this year. And were there any changes over there?
Sandeep Modi
So
Arun Misra
Just one thing I will correct you that we don’t have anything called royalty fee. It is brand and strategic services fee. So I think let’s. Let’s keep it. There is no royalty brand
Sandeep Modi
License is extended services fee. I will first come to the dividend. I think last year also Q1 in the June month we declared the company declared the board approved the dividend for the FY26 as a first insulin dividend. And I think dividend is not dependent upon the this year profit dividend is out of the earnings which company has. So we have almost 22,000 crore worth of the retained earning. And out of that board has assumed the first insane dividend of 11 rupee which is around 4300 crores rupees.
So I think that should be. And as for the brand FE license and static services fees is concerned that has been a paid as per the contract entered into the with Veda limited for this year.
Pinakin Parekh
So what would be that amount be for this year versus last year?
Sandeep Modi
This year is around 1300 crore
Pinakin Parekh
And FY27. And what was this in FY26?
Sandeep Modi
Similar kind of amount.
Pinakin Parekh
Understood. Thank you very much.
Operator
Thank you. Next question is from Sumangal Nivatia from Kotak Securities. Please go ahead.
Sumangal Nevatia
Yeah, thank you for the chance. So my just continuing on the previous question just want to know the contract for the brand fee when it is due for revision in terms of the percentage share.
Sandeep Modi
So branched and royalty services field contract is valid till 2030. So in between there is no renewal, is there? It’s a valid till 2030
Sumangal Nevatia
And the payout happens for the full year based on some estimate at the in the first quarter, is that right?
Sandeep Modi
Yes, yes.
Arun Misra
But it’s settled at the end. It’s a settled
Sandeep Modi
At the end of the year. This is the annual account. So like for FY26 after the annual account announced audit we have to pay 100 crore pertaining to FY26.
Sumangal Nevatia
Okay, okay. Understand. So my second question is on dividend. So FY26 if we see we’ve paid some 21 rupees which is a decline versus last year whereas profitability has gone up much more. So generally going forward given the massive tailwind on earnings, given the commodity prices, what should we expect? Should I mean is there now a plan to pile on cash given the upcoming capex or should we expect a high payout to continue?
Arun Misra
So we will continue to. I think the board will continue to balance between paying dividend and investing for the expansion. So that balance will continue And I don’t think it is one or the other. Both will continue because when we declared expansion the question put to me was will you be in a position to pay dividend? Now our operations are proving that we are able to maintain both that we are able to pay dividend as well as we are continuing to expand by investing in our assets.
Sumangal Nevatia
Okay, but conceptually so cash flows will be used for dividend and growth. We would not be using debt for our growth expansion. Ideally
Arun Misra
No, but for cash timeline, you know, mismatch or if I get better earning by my own investment rather than and loan is much cheaper because of our balance sheet strength then we would take those calls. But primarily we are earning enough to fund our growth. That is for sure.
Sumangal Nevatia
Understood, Understood. The second question is on the hedging strategy. Given the volatility in the prices both for silver and to some extent zinc as well. Broadly, what should we expect? I think currently we are around 10% hedged. So are we continuously monitoring the prices and then I mean evaluating to increase or broadly 10, 15% is what we expect and then rest leave it to the market.
Sandeep Modi
I think as we said in the earlier Calls also we will be. Our philosophy and policy has been to hedge between 10 to 20%. And at this point of time we are comfortable with the 10%. We’ll see if the price will spike, which we believe is not a sustainable kind of thing because of the water, then we can look at. But if you see the last quarter we have not hedged anything. We’ll continue to be comfortable at 10%.
Sumangal Nevatia
Okay. And generally how far can we do it based on liquidity? Are we also evaluating FY28 or only? Currently one or two quarters ahead.
Sandeep Modi
We will not be going beyond 12 months. That is very short.
Sumangal Nevatia
Understood, Understood. And just one last question. Can I ask one more question?
Sandeep Modi
Yeah, yeah, please go ahead.
Sumangal Nevatia
Okay. With. With respect to a half a million ton fertilizer plant, can you share what. What is the volume expectation, ramp up schedule, economics and are we facing any RM challenges there due to the ongoing conflict in Middle East?
Arun Misra
No, we have not started operations at all. And
Sumangal Nevatia
Another
Arun Misra
Three months down the line we should be able to phosphoric acid plant which is the first part. Then maybe 20, 26 end or 27 early, which is January, we will be able to start our DAP manufacturing plant. So right now there is no impact of rock phosphate and all that on our operations.
Sumangal Nevatia
Okay. All right. Okay. That’s very useful. Thank you. And all the best. Yeah,
Operator
Thank you. Next question is from the line of Rashi from city. Please go ahead.
Raashi Chopra
Thank you. What was the revenue and the EBITDA from the lead concentrate sale during the quarter, please?
Sandeep Modi
Quarter four you must be asking.
Raashi Chopra
Yes.
Sandeep Modi
So quarter four the revenue was around 500 crore and EBITDA was around 330 crore. Hello
Operator
Rashi, does that answer your question? Yes,
Raashi Chopra
Yes. I still have a follow up question. So your EBITDA has actually declined sequentially on the sale of the lead concentrate.
Sandeep Modi
Depends upon the how much lead concentrate you are selling. We are not into the business of selling the concentrate. Since we were having the MIC production higher compared to the metal production. That’s why we use it. And I don’t think EBITDA has gone down. EBITDA in Q3 was around 250 crore and this time 330. But of course it is not on account of the. It is a function of the prices USD INR rate at this at the same time TCRC and the quantity which you sell
Raashi Chopra
On the hedging. What was the hedging loss in the fourth quarter?
Sandeep Modi
So aging. I will not say it’s a loss. It is a delta compared to the prevalent market prices 1100 crore was.
Raashi Chopra
Sorry how much
Sandeep Modi
1100 crore rupees was the delta between the haze price and what was the market price?
Raashi Chopra
This is for the fourth quarter and for the full year what is this number?
Sandeep Modi
The delta was 1500 crore.
Raashi Chopra
On the capex. Could you just break down the 26 capex into growth and maintenance what was the actual number?
Sandeep Modi
Capex was 3,600 crore for the full year and growth capex was 2,000 crore
Raashi Chopra
36 for maintenance. Okay, yeah thank you, thank you, thank
Operator
You. We’ll take our next question from the line of Jam Shah from INSEC securities and Finance. Please go ahead.
Unidentified Participant
I’m audible sir. Yeah thank you so much for this opportunity and congratulations on the good set of results. So my question is related to what was asked before. So you said that you know you will be planning to take the renewable energy share to 30 to 35% so could you, could you just give us the timeline of how are we going to reach to 70%?
Sandeep Modi
70% is by FY28 as we committed earlier as well as part of our sustainability code by FY28 we will be 70% rounding loss.
Unidentified Participant
No. So my question is because at 18% we are at the zinc cost of production at 903. So while we reach to 30 to 35% and eventually to 70 would this change our cost of production estimate?
Sandeep Modi
So it will depend upon the own generation cost. So it is a function of the what is the imported coal prices at that point of time? What will be the domestic coal price at that point of time? So at currently in this year we had a benefit of the lower coal prices and the domestic domestic coal utilization. So we earlier said that every 2% renewable energy increase will have a $1 cost reduction. We still stand by it given the long term coal prices. So if we move from 20 to 70% we can see the further potential of $25 part in cost reduction.
Unidentified Participant
Okay, understood. And in terms of VAP share for FY26 if you could just share the number and also an adjoining question would be that we are planning to take it to 50% with that in mind how much realization would improve for us in the coming years?
Sandeep Modi
So I think earlier, as I said earlier, VAP is not like other businesses like in aluminium where the VAP commands the 500 or thousand dollar extra incremental NEP. It’s not like that. Of course we are also into VAP. We have around 24% VIP in FY26. But in our, in Hindu in a zinc case VAP hardly commerce. 50 to $60 per ton over and above the normal. What you say the SSG think so it is not a more on. It is not on account of the profit. It is more on account of the supplying to the customers who require in India.
So this help us to increase the domestic market share in India.
Unidentified Participant
And when do we plan to come up with the you know final plan of 600kt that we have mentioned in our, you know slide number 26 you know and detailed plan on how much the capex and revenue potential would be that would be helpful.
Sandeep Modi
Two, three questions that Mr. Mishra explained about the whole thing that we are working on a 1 million ton smelter out of this 250kt already started at within Rajasthan and by the quarter one end we should be ready with a complete conceptual plan and a layout of the plant and engineering and then we can see in the July or some that time we can have a board announcement after the full feasibility.
Unidentified Participant
Okay. No, thank you so much sir. Thank you and best of luck. Thank you.
Operator
Thank you. Next question is from the line of Vikas Singh from ICIC Securities. Please go ahead.
Vikash Singh
Good evening sir and thank you for the opportunity. So my first question pertains to our silver hazing strategy. I’m a little bit perplexed because silver prices in the last quarter had touched even hundred plus doll. So if we are hedging certain quantity as a, you know, as every month certain quantity our average should have been higher than what you have said in at the opening remark. So just wanted to understand have we stopped hedging after certain point of time realizing our mistake and then the server prices turned upside down.
What happened? Actually
Sandeep Modi
Because just a humble request, I don’t think anybody could say it’s a mistake. Every company has their own policy of hedging the volume. So we as earlier said 10 to 20% annual volume we will hedge and accordingly we hedge the 10% for this year. Last year 20% and we stopped hasted after the 10% hedging. So you are right. After the Q3 we have not heed anything. But that is not on account of anything else. It is more account of what company follows the Strategy. Given that 58, 59% kind of EBITDA margin of the company.
We believe that and silver being a byproduct we believe that it’s not a worthwhile to experiment and do the hedging beyond 10%. And every company has a philosophy. Either you have the Indian counterparts in the other metal business who has a 40 to 60% haze for the many of the quarters. So I don’t think it is a mistake. More about the strategy. You always have open position over 80% on which you can earn much better for by the hedging. I would not say pray to the God that prices should fall. Prices should always be increasing on the remaining portion.
Vikash Singh
Understood? No, but I mean that you are talking about 10 persons hedging but at the end of 2Q your overall hedging for the remaining of second half FY26 was almost 45 50% of the total silver which we are supposed to produce. So that’s why I’m saying is there any, is there any standardization that I would Keep on hitting 10 or 15% on a rolling basis. How should we look at it?
Sandeep Modi
So we are not following the policy of the ruling 12 months. However at the same time our philosophy that we will not go beyond 12 months and will be rebooking whenever required 10 to 20%. If I am a 10% there is no compulsion them that I have to go up to the 20%. It is also not a compulsion that if I unwound the position then I have to again increase to 10%.
Vikash Singh
Noted sir. So my second question pertains to our long term target of 2 million ton. Assuming there would be a minimum of 25% kind of the, you know, additional premium which you might have to pay and the CAPEX cost would also be higher. So any IRR estimates which we have done for the new project if you could share with us
Sandeep Modi
For 250 KTPA. We have already done the IRR estimate and we don’t declare the irr. But as I said earlier it’s a double digit IRR and much much better than compared to industry benchmark. And because it also reflects on account of our lowest cost of production in terms of OPEX and In terms of capex also when we announced we say it’s around 26 $600 per ton capex cost. So you IRR is in the double digit and for the 1 million ton we need to yet work because once we have the conceptualization, layout and everything engineering is technology finalization then only we can do.
But of course I can confirm that it will be a double digit irr.
Vikash Singh
Notice that. Thank you for answering my question and all the best of you sir.
Sandeep Modi
Thank you.
Operator
Thank you. We’ll take a last question from the line of Pratik Singh from IIFL Capital. Please go ahead.
Unidentified Participant
Hi, thanks for the opportunity. The first question is just a clarification on the dividend. So I think in the past we had a status dividend policy of a minimum of 30% of PAT given that the PAT or EPS last year was around 30 rupees. So you have to clarify for FY26 the dividend given was 10 rupees, right? Not 21. This 11 will count in FY27. Is that correct?
Sandeep Modi
Yeah. 10 rupees was a dividend in FY26.
Unidentified Participant
Understood. And 11 will count for 27. Understood. So and minimum 30% is the policy that that stays as of now regardless of capex.
Sandeep Modi
Absolutely.
Unidentified Participant
Understood. Thanks. And the second question is largely on the other operating income increase. I’m not sure if it was covered in opening remarks but we saw a decent increase in other operating income. What was that driven by? Was sulfuric acid sales part of it? And how are we seeing the prices of acid sales vis a vis let’s say 3Q or have they just started increasing in 1Q only?
Sandeep Modi
So other operating income consists of two main item. One is the as you said sulfuric acid and. And second is the byproducts and various scrap and residue which we sell. Second as I said we have entered into the agreement with the third party for setting up the ancillary businesses in which it’s a waste to wealth where we provide them the residue, they process it and they provide the finished goods like or other metals which are further used in our processes. So that as per the accounting that goes that around 600 crore rupees for the whole year is part of other operating income as well as also part of the other expenditure.
You see the other expenditure is also increased so it’s offsetting item. But accounting doesn’t allow to do the offsetting. It has to capture into both other operating income and other expenditure. From the costing point of view two items come to the cost credit. One is a scrap and reservation revenue sales which is around for the whole year was around thousand crore. And the remaining is the sulfuric acid which is around 1400 crore.
Unidentified Participant
Understood. And how are sulfuric acid prices right now sir versus let’s say 4k.
Sandeep Modi
So it is a link to the sulfur index. So the sulfur. So and as the sulfur index moves the prices also get quarterly reset.
Unidentified Participant
Okay, and just one last question on the cold side again I’m not sure if you covered it earlier what was the school sourcing mix and how are we seeing the auction prices by coal India given that you know there is gas shortage so people might move into coal.
Sandeep Modi
So during the whole year we were around 53% domestic coal materialization and 18% were the renewable energy. So overall around 70% from the this way or 30% was the imported coal. If you go for the 2 4, around 64% was the domestic coal and 18% this and the remaining was the imported coal. So we believe we have the linkage coal auction where the prices are determined by the government of this coal India. We have not seen any steep increase in the domestic coal. Given that at this point of time there is a huge delta between the import and domestic coal.
Almost 140% domestic coal will always be cheaper for us
Unidentified Participant
Domestically we source only via linkage, not by e auctions.
Sandeep Modi
Very marginally through E auction.
Unidentified Participant
Understood. Thanks. Thank you for answering my questions and all the best.
Operator
Thank you. I now hand over the conference to Ms. Raksha Jain for closing comments. Over to you.
Raksha Jain
Thank you operator. Thank you everyone for joining us today on this call. If there are any follow up questions or any clarification required, please feel free to reach out to the University relations team. Thank you.
Operator
Thank you on behalf of Hindustan Zinc. That concludes this conference. Thank you for joining us and you may now disconnect your lines.