Welcome to the 99th edition of The Chatter — a newsletter where we dig through what India’s biggest companies are saying and bring you the most interesting bits of insight, whether about the business, its sector, or the wider economy. We read every major Indian earnings call and listen to the interviews so you don’t have to.
We’re always eager to improve—please share your ideas on how else we can innovate “The Chatter” format to better serve your needs.
In this edition, we have covered 6 companies across 5 industries
Real Estate
DLF Limited
Building Materials
UltraTech Cement Limited
Software Services
L&T Technology Services Limited
Financial Services
Union Bank of India
Yes Bank
Metals
Hindustan Zinc Ltd
Real Estate
DLF Limited | Large Cap | Real Estate
DLF Limited is a real estate development company engaged in colonisation, land acquisition, planning, construction, and marketing of projects. They also offer leasing, maintenance services, and recreational activities, contributing to the overall development of their business.
[Concall]
DLF continues to raise prices at its ultra-luxury Dahlias project. Management expects the upcoming experience centre to support further price appreciation.
“If you see this time’s report, Dahlias has been seeing a price increase. In fact, it has already gone up by almost 10% this time as well. After the experience centre, once the show-and-tell begins, it will continue. Including Camellias, we did gross sales of about ₹1,900 crore in the total super-luxury segment this quarter.”
— Akash Ohri, Managing Director & Chief Business Officer
Interestingly, DLF follows a progressive pricing strategy at Dahlias rather than adjusting prices based on how quickly apartments are selling.
“Dahlias’ price algorithm makes sure that there is an increase with every sale. It is not linked to velocity; it is a progressive pricing mechanism.”
— Akash Ohri, Managing Director & Chief Business Officer
Management says even the relatively lower-priced southern-facing apartments have crossed the ₹100 crore mark, establishing a new benchmark for luxury housing.
“There has also been a consistent pace of sales as far as Dahlias is concerned. If you have been tracking it for one and a half years, you would have seen this. A reasonable amount of trust has now been established. Most importantly, the price point had to be established and understood by people, and that is now a given.
I am happy to also tell you that most recently, in the South, we achieved about ₹100 crore—we just crossed ₹100 crore per apartment—which is also a new landmark. What is happening is that this has become the new norm, and that is how it is progressing.”
— Akash Ohri, Managing Director & Chief Business Officer
Despite exceptionally high ticket sizes, Dahlias continues to record steady sales. Management expects the upcoming experience centre to provide further momentum.
“We have demonstrated enough. If you see the current position, we are nearing approximately 280 sales. So far, 274 units have been sold. We have also sold 276, with two more units having been added. That is what I am saying—we are nearing almost 280.”
— Akash Ohri, Managing Director & Chief Business Officer
Management explained its conservative approach to reporting sales bookings, particularly for high-value transactions involving NRI customers.
“What we do is that we take the initial booking, which is a substantial amount, as you know—₹50 lakh. Everything is concluded before September 30. The paperwork and all that sometimes takes time, but here even the forms, KYCs, and everything else had to be completed. We report once the money is in the account and the forms and KYCs are completed. We do not report otherwise.”
— Akash Ohri, Managing Director & Chief Business Officer
DLF expects revenue recognition to accelerate as Arbour and other large residential projects begin reaching completion.
“As we have said, our inflexion point is 27-28 with Arbour, and thereafter a series of projects will start getting completed. From 27 or 28 onward, starting with Arbour, you will see a series of projects getting completed.”
— Badal Bagri, Group CFO
One of the most important remarks from the call concerns DLF’s revenue recognition pipeline. The company expects a substantial portion of previously booked sales to flow into its financial statements as projects are completed.
“We highlighted earlier that our revenue inflexion point, relating to almost ₹75,000 crore of projects launched and sold so far, will begin in 27-28. You will see the inflexion point in 27-28, and over the next 2 to 4-5 years, this entire revenue will be recognised.”
— Management
Strong customer collections have helped DLF maintain a substantial net cash position despite distributing nearly ₹2,000 crore in dividends.
“Overall collections stood at ₹2,780 crore in the current quarter, resulting in operating cash flow of approximately ₹1,858 crore. The net cash position stood at approximately ₹15,100 crore despite a very, very strong dividend payout in the current quarter of close to ₹1,980 crore.”
— Badal Bagri, Group CFO
DLF’s 50-million-square-foot rental portfolio has achieved record occupancy, supporting steady growth in its annuity business.
“Our rental portfolio stood at 50 million square feet. The portfolio has now achieved its highest-ever occupancy levels, at 96% in terms of area and 97% by value. This continues to be among the highest in the industry. The rental business maintained strong momentum, delivering healthy top-line growth and high-teen growth in profitability.”
— Badal Bagri, Group CFO
Pollution-related GRAP restrictions and labour migration during the festive season could temporarily affect construction activity in Gurgaon. However, management doesn’t expect a material change in project completion timelines.
“Regarding the completion timeline, give or take a quarter, we do not foresee any challenges right now. You are right that the last quarter and possibly this quarter could see a slight blip in construction outflows, primarily for two reasons. First, we are now entering the phase of labour migration back for the Chhath festival. Second, the GRAP guidelines printed in the papers pertain to Delhi, and the Delhi government has announced them. Typically, in Gurgaon, we have seen GRAP continue for 30 to almost 40 days once those guidelines come into play. There may therefore be continued challenges in construction outflows during Q3. However, I do believe that fundamentally the contractors are in place, their labour arrangements are in place, and we should see decent progress this quarter as well. Again, this is a concern, but I do not think it is a crisis by any stretch.”
— Management
Building Materials
UltraTech Cement Limited | Large Cap | Building Materials
UltraTech Cement is India’s largest manufacturer of grey cement, ready-mix concrete and white cement, and the cement flagship of the Aditya Birla Group. It recently entered the wires and cables vertical in September 2026 under the UltraVolt brand.
[Concall]
Cement prices usually decrease during the July–August monsoon months. This year they held up, and UltraTech’s CFO says prices turned up sharply in the second half of September. Spot realisations are now about 5% above the Q2 average, so most of this benefit should show up in Q3, not Q2.
“In a normal year, cement prices slip during July and August as rains slow sites and dealer-chasing volumes. This year, the industry largely avoided that. Pan-India average trade prices for Q2 were stable in line with Q1, with the quarterly average 1–1.5% lower, mainly because of a soft August. In the second half of September, prices turned firmly upwards. We exited September with trade prices at least about 3% above the Q1 average. The quarterly average is weighted down by a soft August; the run rate we take into Q3 is materially better.”
— Atul Daga, Chief Financial Officer
Volumes grew 13.8% against an industry growing at close to 10%, and capacity utilisation rose to 71% from 66% a year ago. Because fixed costs grew much slower than volumes, cost per tonne fell even as new plants came on stream.
“Other fixed costs per ton were 6% lower for us than last year, even after absorbing new capacity, because absolute fixed costs grew by only 4%, well below the volume growth of 13.8%. This is the operating leverage working for UltraTech as intended.”
— Atul Daga, Chief Financial Officer
For years, cement makers have chased volumes while prices lagged costs. Management now says the industry is effectively sold out, which gives producers room to raise prices.
“I think pricing will lead the way and is clearly leading the way. Given the dynamics of the cement industry and the spread of the industry across the country, prices always rise with a lag. Whenever macro events have impacted the industry, the cement industry has still taken time to first absorb its existing capacity in the market before increasing prices. Now, I think we are sold out, so we have to take price increases. As long as we were able to sell material, there was no need to increase prices. This is a sweet spot to be in: price improvements, volume growth and cost optimisation. What more could one ask for?”
— Atul Daga, Chief Financial Officer
Volumes grew 13.8% against an industry growing at close to 10%, and capacity utilisation rose to 71% from 66% a year ago. Because fixed costs grew much slower than volumes, cost per tonne fell even as new plants came on stream.
“Other fixed costs per ton were 6% lower for us than last year, even after absorbing new capacity, because absolute fixed costs grew by only 4%, well below the volume growth of 13.8%. This is the operating leverage working for UltraTech as intended.”
— Atul Daga, Chief Financial Officer
This is the most important shift in tone on the call. For years, cement makers have chased volumes while prices lagged costs. Management now says the industry is effectively sold out, which gives producers room to raise prices.
“I think pricing will lead the way and is clearly leading the way. Given the dynamics of the cement industry and the spread of the industry across the country, prices always rise with a lag. Whenever macro events have impacted the industry, the cement industry has still taken time to first absorb its existing capacity in the market before increasing prices. Now, I think we are sold out, so we have to take price increases. As long as we were able to sell material, there was no need to increase prices. This is a sweet spot to be in: price improvements, volume growth and cost optimisation. What more could one ask for?”
— Atul Daga, Chief Financial Officer
The pressure is on the cost side. The West Asia conflict has pushed up fuel costs, which rose from ₹45 to ₹51.5 per bag year-on-year. UltraTech has cut its reliance on petcoke to cushion the hit, but management was candid that it can’t predict where costs go from here.
“Petcoke prices have shot through the roof. They were trading around 180 dollars per ton the last time I checked. Regarding petcoke, we have reduced our dependence since the last quarter. Today, we are down to about 25% petcoke consumption in our overall mix. Coal-fired power plants are being required to blend imported coal. Coal India is giving priority to the power sector, which tightens domestic availability for the industry. Industrial diesel prices have been continuously increased by the government, which impacts raw material costs through mining and transportation costs. These cost pressures are here for some more time.”
— Atul Daga, Chief Financial Officer
The monsoon this year was the weakest since 2015, which normally hurts rural demand with a lag. Management argues that the rural economy now depends far less on farm incomes, and that urban housing and infrastructure will carry demand.
“A weak monsoon can hurt farm incomes and, with a lag, rural housing. However, an important point to keep in mind is that the Indian economy has been evolving. Several non-crop activities are contributing to almost 40% of the rural economy, with MSMEs and non-agricultural sectors growing and mushrooming everywhere in the country. Besides, the last 4 years of good monsoons will also act as a cushion. We expect rural demand might soften in some areas, while urban housing, infrastructure and private-sector capex will continue to grow very strongly.”
— Atul Daga, Chief Financial Officer
Despite the cost pressure, management is sticking to its target of ₹1,400 EBITDA per tonne by the exit of March 2028. A big part of that comes from fixing India Cements, which UltraTech acquired, and whose plants currently earn far less per tonne.
“My expectation is that business as usual will enable us to deliver 1,400 rupees. If cost pressures arise, they will be covered by price increases. Therefore, yes, we will deliver our commitment. India Cements, where we recorded 500 rupees per ton in their books, will provide significant cost-improvement benefits and take us to a four-digit mark. We will be undertaking major shutdowns of the India Cements kilns for upgrades, attaching WHRS, improving the cooler, increasing the preheater height and so on.”
— Atul Daga, Chief Financial Officer
UltraVolt, the wires and cables business, launched on September 3. Management says it is pricing at par with incumbents rather than undercutting them. And because cable revenue moves with copper prices, the original revenue target has grown on its own.
“Our positioning is at market parity. Differentiation is being driven by our product proposition and not by undercutting prices. With an annualised capacity of 78,000 tons of copper consumption, we are already number two in our space. We do not need to invest any further to become number two in terms of installed capacity. When we announced our plans in February 2025, we had targeted revenue of 10,000 crores. This market is driven by copper prices. If copper prices go up, that 10,000 crore number has already increased by itself. It is on autopilot. Therefore, a 10,000 crore number would be somewhere around 16,000–18,000 crores, depending on copper prices.”
— Management
Software Services
L&T Technology Services Limited | Small Cap | Software Services
L&T Technology Services (LTTS) is an engineering services company and a subsidiary of Larsen & Toubro. It helps global clients design and develop products across mobility, sustainability (plant and industrial engineering) and technology.
[Concall]
Revenue grew 2.7% sequentially in constant currency, and EBIT margin reached the mid-16% level management had promised, a couple of quarters early. More than half of the large deals it won were AI-led.
“Revenue was USD 317.1 million, up 2.7% sequentially and 4.8% year-on-year in constant currency on a continuing operations basis. EBIT margins improved by 60 bps quarter-on-quarter to 16.3%, delivering ahead of schedule on our aspiration for mid-16% EBIT levels. Large deal TCV was USD 203 million across segments, with over 50% of the deals being AI-led wins. Both order backlog and pipeline are up year-on-year.”
— Amit Chadha, CEO & MD
Every IT company now reports an AI revenue number, and the definitions vary. LTTS puts its AI-led revenue at about $120 million annualised, or roughly 9.5% of revenue.
“If we take any deliverables that we are creating and a significant part of the deliverable is created through the leverage of the AI stack, then we classify that as AI revenue. The significant part is very important. It is not as though you can build a report at the end of the project and claim AI revenue. It has to be part of the deliverable that we create, and that is how we track it. The number that you see is approximately 9.5% for the quarter, which is around USD 120 million on an annualised basis.”
— Munjees Singh, Chief Operating Officer
Management highlighted that the tone of client conversations has changed from cutting costs to growing. It also claims a head start over peers in AI-led engineering.
“AI capex spending across chips, software, industrial electrical companies, and telecom infrastructure is powering up a lot of companies and a lot of spending. Second, when I or our executive team speak to our clients, they are largely focused on growing their businesses despite the unstable environment rather than on cost-cutting. That is a significant shift that we are seeing. Third, everybody wants help with AI and wants to understand how they can become more resilient and productive. I also believe that we are approximately 9–12 months ahead of our competition and peer group in this area.”
— Amit Chadha, CEO & MD
The data-centre build-out is a new line of business for LTTS. Management laid out the different layers of a data centre where it can do engineering work, from the physical plant to the AI agents running on top.
“For the physical infrastructure, we work through OEMs, electrical companies, HVAC companies, and others, and that revenue for us is showing up in Sustainability. GPU bring-up, infrastructure validation work, building clusters, baselining, and similar activities are part of the Tech vertical. Then there is the control plane. There is token metering software to be developed, such as usage token ingestion, automated invoicing, anomaly guardrails, and similar work. Then there is observability, autonomous AIOps, and, finally, agents on top. There are approximately 6 or 7 layers here, and we are a service provider. We can work with anybody setting up and running a data centre, or with a neocloud, to help them.”
— Amit Chadha, CEO & MD
Management thinks European carmakers still have to take the write-offs and reset their technology plans that US carmakers have already done, and expects that to happen within a year.
“Like US Auto, what they did last year was to go ahead and take some write-offs clearly from the technology side, and they moved very decisively towards new technology vehicles. They started SDV and AI-native solutions, among other initiatives, and they are seeing the benefits of that. At some point, Europe Auto will have to take a step back and potentially do whatever it has to do in terms of write-offs and so on, and rebaseline itself. Many companies are talking about it, and some are doing it, so I do believe that should clear up in the next 6, 9, or 12 months.”
— Amit Chadha, CEO & MD
Wage hikes kick in during Q3 and will cost 50–80 basis points of margin. Even so, management says it plans to hold margins around the mid-16% level, helped by a richer segment mix and AI work.
“In the near term, you should assume that margins will be at these levels, around the mid-16% EBIT level. A few things have helped us reach these margin levels. First, the segment mix has improved. Sustainability revenues now contribute almost 38% of overall revenues. Second, AI revenue has now reached USD 120 million on an annualised basis. Third, the quality of revenues is improving across segments.”
— Rajiv Gupta, Chief Financial Officer
Financial Services
Union Bank of India | Large Cap | Financial Services
Union Bank of India is one of the largest public sector banks in India, offering a wide range of retail, MSME, and corporate banking services. Following its 2020 amalgamation with Andhra Bank and Corporation Bank, it focuses on digital transformation and sustainable credit growth.
[Concall]
Management has estimated a total impact of 5,500 crores for the transition to new Expected Credit Loss (ECL) accounting rules. By building an early buffer of 1,000 crores, the bank aims to absorb the remaining 70 basis point impact on capital through its standard quarterly earnings.
“Earlier also we had shared the ECL impact on us. We had said that the impact of ECL on Union Bank of India would be somewhere in the range of 5,500 crores. I would also like to add that since the March quarter, we have added around 1,000 crores of additional provision buffers. We provided 700 crores in March, 100 crores in the June quarter, and another 200 crores in the current quarter as an additional provision. As of now, it appears that we will be able to use this for ECL provisioning. Therefore, 5,500 crores is our total estimate, of which we have already provided 1,000 crores. If you assess the impact of 5,500 crores on ROA, we have around 8 lakh crores of RWA. From that perspective, the impact on CET1 would be 70 basis points if absorbed separately. However, you are also considering our quarterly profitability. One quarter’s profit itself is quite sufficient to bear this ECL provision, despite the RBI having provided multiple years for implementation.”
— Anish Pandey, MD & CEO
The bank has exceeded its target for foreign currency deposits, securing 2.25 billion dollars to manage its asset-liability profile more effectively. This funding helps maintain a domestic loan-to-deposit ratio of 84%, which management considers a sustainable and comfortable level.
“Coming to the US dollar facility, since the beginning, including during the last quarter when we were asked about it, we were clear that we aimed to garner USD 2 billion under the RBI’s special window scheme for US dollar FCNR deposits. We actually garnered USD 2.25 billion, so this is not an issue. Our total all-in cost, including everything, is around 7%, and {? 43 bips ?} is the margin; 40 plus {? bips ?} is the margin with our foreign branches. I think we are well within the cost parameters. Coming to the CD ratio, we have always said that the domestic CD ratio, or loan-to-deposit ratio, is different from the global ratio. The global ratio is always higher, and the domestic ratio is always lower. If you take the domestic ratio, we are at around 84%. We have always believed that somewhere between 80% and 84-85% is a comfortable range, subject to the fact that it is not a specific range that applies equally to everyone.”
— Anish Pandey, MD & CEO
Adjusting for the removal of low-yielding and legacy bad loans, the bank’s underlying credit growth is over 20%. The increasing share of high-credit-score retail borrowers and externally rated corporate loans suggests a structural improvement in loan book quality.
“If we take into account the 33,000-36,000 crores taken out through IBC, along with almost 50,000-70,000 crores of low-yielding assets that we have removed, credit growth is quite good, at more than 20-21%. At the same time, on the retail side, our exposure to customers with a CIC score of 700 and above has improved. I am referring only to the last quarter, but you can see that it has improved over the last four quarters. For exposures of 25 crores and above with external ratings, almost 94-95% are rated, and this also improved last quarter. These two figures show that we are underwriting quality assets.”
— Anish Pandey, MD & CEO
Management is targeting high-growth sectors like green energy and data centres while building the internal expertise to evaluate emerging fields like hydrogen and nuclear power. By underwriting and then down-selling large loans, the bank generates fee income while keeping its own risk exposure manageable.
“At present, Union Bank is a strong player in renewable energy, solar, BESS, or battery energy storage systems, data centres, and other areas. We are already active in these areas. We have underwritten several good proposals and have also down-sold them. To give you an indication, over the last 9-11 months, we have underwritten almost 90,000-95,000 crores, or 1 lakh crore, of good-quality proposals and have down-sold them. That is how we are progressing. Coming to newer streams such as hydrogen and nuclear power, these are new areas that are emerging. We are also undertaking employee skill-development programs. We are engaging with various rating agencies because they are often better positioned to understand the risks, business models, projections, and other factors involved in underwriting.”
— Anish Pandey, MD & CEO
The bank has a 1 lakh crore corporate loan pipeline specifically for infrastructure projects expected to be deployed over the next 18 months. This visibility in sanctioned proposals supports management’s confidence in meeting future credit growth targets.
“We have more than 1 lakh crore in the pipeline for large corporates, primarily in infrastructure, which is likely to be disbursed over the next 1.5 years. We do not have any problem building the pipeline further. We also have good credit proposals in hand. These are sanctioned proposals; what I am referring to is the sanctioned pipeline.”
— Amrendra Prasad, Executive Director
Management expects net interest margins to continue improving as recent interest rate hikes are passed through to the bank’s 55% repo-linked loan book. This upward repricing is anticipated to drive higher overall returns on assets in the coming quarters.
“With an increasing rate cycle, the effect is generally constructive, as you have seen. Let me go back to December, when the repo rate was cut by 25 basis points, and in March we suffered a decline of almost 60-70 basis points, with NIM coming down to 2.64. After that, there was no change in the repo stance. From there, we built up by around 22 basis points to the current level of 2.86. The stance has now changed, and the impact will come in the coming quarters. Now that there has been a rate hike, we are confident that it will have a positive and constructive effect on NIM and ROA going forward. At the same time, our repo-linked book is almost 53-55%, so the impact has to be transmitted, and it is being transmitted.”
— Anish Pandey, MD & CEO
Yes Bank | Mid Cap | Financial Services
Yes Bank is a private sector banking institution in India that offers a wide spectrum of retail, corporate, and investment banking services. The bank has been undergoing a structural transformation following a 2020 reconstruction scheme led by the State Bank of India.
[Concall]
The management addresses the Supreme Court ruling that forces the bank to reinstate over 8,000 crores in previously written-down bonds. This creates a significant accounting hit to common equity capital, though the bank’s total Tier 1 ratio remains relatively stable.
“The Honourable Supreme Court has upheld the Bombay High Court’s judgment setting aside the AT1 write-down and dismissed the appeals filed by Yes Bank, the administrator, the Reserve Bank of India, and the Union of India. We respect the judgment and are examining it carefully, including the options available to the Bank. Based on our current assessment, which is indicative, and as of September 30, 2026, the reinstatement of the AT1 principal amount is expected to have a pro forma impact of approximately 240 basis points on our Common Equity Tier 1 ratio, including profits. Our overall Tier 1 capital ratio is expected to remain around 13.7% on a pro forma basis.”
— Vinay N. Tonse, MD & CEO
Management breaks down recent high-value foreign currency transactions that skewed the bank’s reported growth figures. Investors should focus on the 17.6% underlying growth rate to understand the bank’s core domestic lending performance.
“The Bank mobilised 18,575 crore of FCNR-B deposits and extended foreign currency term loans of 15,215 crore through the IBU at GIFT City. These transactions affected the reported growth rates and certain income and expense lines during the quarter. Reported advances grew by 23.7% year-on-year. Excluding the FCTL linked to the FCNR mobilisation, advances grew by 17.6% year-on-year. The corresponding normalised CD ratio, or credit-to-deposit ratio, stood at 83.1%.”
— Vinay N. Tonse, MD & CEO
The CFO explains that while the bond reinstatement appears as a loss on the profit statement, it is effectively a reclassification of equity reserves into debt. This helps investors understand that the judgment affects capital structure labels more than it destroys fundamental bank value.
“What we have done right now is provide you with a pro forma that has been taken through the P&L, and the impact is available. In terms of the substance of this matter, we believe that routing it through the P&L is only a means. In substance, if you think about the restatement, it is actually a balance sheet structure where the core reserves are being used to reinstate the liability. That is the accounting perspective. When we finally effect this, of course, it will be subject to our assessment, and there are multiple operational aspects that we need to conclude.”
— Niranjan Banodkar, CFO
Responding to analyst concerns about liquidity, the bank confirms that reinstating these bonds does not trigger any immediate cash payments to bondholders. This preservation of cash is vital for maintaining the bank’s operational liquidity despite the legal setback.
“The principal restatement of the AT1 bonds, as I said earlier, is in substance a balance sheet change from the reserves to the borrowings, which are under AT1 classification. There is no repayment and no cash outflow on the borrowings. It is only an accounting restatement that we will have to make.”
— Niranjan Banodkar, CFO
Management details the high percentage of floating-rate loans that reprice quickly when interest rates change. This structure means that recent interest rate hikes should lead to a meaningful boost in interest income for the bank.
“About 65% of the book will be floating, linked either to a repo rate or to a T-bill. T-bills can also have different tenors; for example, there could be a 1-month T-bill or a 3-month T-bill. That is the broad split between floating-rate and fixed-rate assets. As we look at the benefit to margins, let me put in a number. If there has been a 25 basis point increase in the repo rate, assuming that we have a broadly similar sensitivity to other benchmarks as well, you could see margins moving into high single-digit increases.”
— Niranjan Banodkar, CFO
The CFO explains that the bank’s tax assets act as a buffer that allows it to grow its business by up to 13% without needing to ask shareholders for more money. This clarifies why the bank does not feel forced to conduct an immediate, dilutive capital raise despite the court ruling.
“At about 8.2% accretion to ROE, with the benefit of DTA, we have the ability to grow at 11% without consuming capital. There is a DTA release and grossing-up that occurs, and ROE is actually calculated on a higher denominator of equity. Once you adjust for DTA, you are effectively accreting core equity at a higher rate. That means that at about 11%, we have the ability to grow without consuming capital. Potentially, we could work upward toward an ability to fund growth of more like 12% to 13% as we move forward. There is no immediate pressure to solve for capital.”
— Niranjan Banodkar, CFO
Management confirms that rating agencies view the recent court judgment as unlikely to hurt the bank’s creditworthiness. This is important for investors because stable ratings keep the bank’s cost of borrowing from other institutions low.
“Kunal, regarding the credit rating agencies, we have had interactions with them. A couple of them have already issued a bulletin or a note. Our understanding is that they have described this as a very clear credit-neutral event from a ratings perspective. Of course, there are certain other comments that have been made, but at the fundamental level, the headline is that this is a credit-neutral event from a ratings perspective.”
— Niranjan Banodkar, CFO
Metals
Hindustan Zinc Ltd. | Large Cap | Metals
Hindustan Zinc is an integrated producer of zinc, lead, and silver, operating large-scale mines and smelting complexes in Rajasthan. It is recognised as one of the world’s lowest-cost producers of zinc and maintains a dominant position in the domestic Indian market.
[Concall]
Management highlights a global supply deficit in zinc driven by mine closures and a lack of new projects. This structural tightness combined with infrastructure-led demand suggests a favourable long-term price environment for the company.
“Coming to our industry, zinc fundamentals remain strong, with 2026 forecast refined zinc demand at 13.87 million tons, whereas the supply outlook is at 13.69 million tons. That means there is almost a 180 KT deficit in the market. New projects are limited, as we hear, and mine closures and declining grades will mean that over the next decade, we see the markets remaining tight, whereas infrastructure growth, urbanisation, and electrification indicate annual demand growth in the market.”
— Amarendra Prakash, CEO
The global silver market is entering its sixth straight year of supply deficit due to rising industrial and technology-driven demand. As a major silver producer, the company is positioned to benefit from these supply-demand imbalances and the metal’s role in new technologies.
“Silver, again, is expected to remain in deficit for the sixth consecutive year in 2026. The overall shortfall is projected at about 1.44 thousand tons. Industrial demand for silver is increasing. As we look at the new-tech and new-tech markets, as you all know, we have been looking at them, but now the world is realising that old-age minerals and metals are what will actually make this new-tech industry feasible.”
— Amarendra Prakash, CEO
The company has achieved significant operational efficiencies, bringing current production costs well below initial expectations. This substantial reduction in cost guidance points toward higher margin potential for the remainder of the fiscal year.
“Our zinc cost of production in Q2 FY27 stands at 703 dollars per ton. Earlier, we had guided that our zinc cost of production for the year would be in the range of 975 to 1,000 dollars. However, looking at the current improvements in zinc cost of production, we are revising our COP guidance to 825 to 850 dollars for the full year.”
— Amarendra Prakash, CEO
Major expansion projects intended to increase zinc capacity and improve resource recovery are moving forward as scheduled. Successful execution of these projects is critical for the company to achieve its long-term output growth targets.
“Going forward, our growth projects remain on track. Engineering and procurement for the 250 KTPA integrated zinc expansion is almost complete, and mine development is underway. Similarly, the 10 million tons per annum tailings reprocessing plant is also progressing as per plan.”
— Amarendra Prakash, CEO
The company achieved record-breaking quarterly profits thanks to the successful commissioning of new infrastructure and lower production costs. This shows that prior investments in debottlenecking are now translating into significant financial gains.
“Our strong momentum continued in this second quarter, with record quarterly EBITDA surpassing 9,000 crore for the first time. This was driven by consistent execution, the benefit from last year’s debottlenecking project, the commissioning of an additional roaster, and cost of production. Our precious metal portfolio also continues to contribute meaningfully to our profitability.”
— Amit Gupta, CFO
Management is capitalising on high operational leverage and the strategic sale of concentrates to drive triple-digit profit growth. Maintaining a 62% EBITDA margin places the company among the most efficient commodity producers globally.
“The combination of strong revenue growth and operating leverage translated into the highest-ever quarterly EBITDA of 9,285 crore, up 108% year-on-year, with an industry-leading margin of 62%. Profitability was further strengthened by a quarterly zinc cost of production at 703 dollars per ton, excluding royalty, since the underground transition. In addition, we monetised 10 KT of lead concentrate during the quarter, containing approximately 10 tons of silver and 6,000 tons of lead.”
— Amit Gupta, CFO
The company has proactively hedged a portion of its upcoming production at specific price levels to manage market risk. This strategy helps lock in revenue and provides investors with more predictable cash flow despite potential commodity price swings.
“At this point in time, for Q3, we have 40 KT of zinc hedged, and 36 KT of zinc hedged for Q4, at the rate of 3,476 for Q3 and 3,698 for Q4. We also have 8 tons of silver hedged, only in Q3, at a rate of 68 dollars per ounce.”
— Management, Executive Leadership Team
Strong sales of sulfuric acid as a byproduct are helping offset rising costs caused by global geopolitical tensions. Management remains confident that these gains will allow them to maintain their improved full-year cost targets.
“You are right. From a cost point of view, we have a positive surprise on byproduct realisation, which is sulfuric acid, and there are also cost escalations because of geopolitical issues. That is impacting us by almost 50 dollars. In totality, we are delivering the cost, and for Q2, we believe that we will be broadly in the same range, delivering the overall cost estimate for the year at 825 to 850 dollars.”
— Management, Executive Leadership Team
Capital expenditure is currently split between maintaining existing operations and funding new growth, with spending expected to accelerate in the second half of the year. This planned investment supports the company’s long-term capacity expansion goals.
“During the quarter, we spent around 1,200 crore on sustaining capex and around 700 crore on growth capex. For the full-year outlook, we are on the same lines as we guided. The full-year outlook is in the range of 5,000 crore only, and with the expansion that we are expecting in Q3 and Q4, we will be able to spend more during those quarters, typically.”
— Management, Executive Leadership Team
The company is moving forward with exploration and leasing for new mineral blocks, including gold. While production from these areas is several years away, these blocks represent a long-term pipeline for diversifying the company’s mineral portfolio.
“The 4 critical blocks that we have are essentially exploration blocks. Three out of those 4 are exploration blocks. We have guidance that we will finish our exploration program in Q3 FY29. That will be the time when we will know the exact ore body position and the resources available there. Once we conclude this, we can come back with the production plan and all our business plans. The gold blocks are mining leases, and we have executed those mining leases. We will be going ahead. They will give some indication of the resources and the business plan in 2-3 years.”
— Management, Executive Leadership Team
Management is opportunistically selling excess metal concentrate to generate additional profit when it exceeds their internal smelting capacity. This flexible approach allows the company to monetise mined resources quickly when market conditions or capacity constraints dictate.
“During this quarter, we sold 10 KT of concentrate, which consisted of 10 tons of silver and 6,000 tons of lead. Overall revenue generated was 300 crores, and the profit created out of this was 155 crore. In terms of plans, we do not have any specific plan for the concentrate. We take a call based on the business decision. Only if we have more concentrate in place than our smelter capacity do we take this call.”
— Management, Executive Leadership Team
Silver production is currently on track to meet the full-year target of 680 tons when accounting for both refined metal and concentrate sales. Investors should view this stability as a key driver for high-margin revenue through the end of the fiscal year.
“We are confident that we will be able to deliver our guidance of 680 tons. If you see, in the first half we sold 20 KT of concentrate, which also included 20 tons of silver. Taken together, we have done 340 tons, you can assume, in the first half, and we are confident that in the second half we will be able to deliver as per the guidance.”
— Management, Executive Leadership Team
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