Hindustan Zinc's Investment Horizons | Shaping Sustainable Growth

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As a future-focussed organisation with its eye firmly on ensuring efficient and sustainable growth, Hindustan Zinc continues to be an attractive investment proposition for shareholders and investors.

Our agility lends us the ability to renew, adapt and transform quickly to changes in the macro environment. We are proud to have the nimbleness of a start-up despite being in a business. This enables us to maintain our cost leadership and differentiates us in the global industry.

With the vision of creating sustained value for all our stakeholders, we have been continually strengthening and delivering on our operational efficiencies, fiscal discipline, innovation, value-added products (VAP), capital allocation, digitisation thrust and sustainability focus. This strategic blueprint enables us to drive inclusive growth, and to take on new projects for investment with an above average internal rate of return (IRR).

Over the years, we have grown to become the fifth largest silver producer and second largest zinc producer globally and with the vision of improving the same, we continue to progress further. Our strategic focus ensures superior industry leading returns to our investors.

KEY INVESTMENT PROPOSITIONS

We are continually improving our investment guidance year-on-year. With strong focus on our fundamental goal of maximising shareholder returns, we have declared the highest ever dividend of ~₹ 32k crore and have successfully delivered on our operational guidance for FY 2022-23.

Investment Case 1

Portfolio of Mines with Long Life

Continual and strategic efforts to enhance Ore Reserves and Mineral Resources (R&R) through exploration
Adoption of new and innovative technologies and advanced geophysics to run an extensive exploration programme for delineation and upgradation of R&R within our licence areas
Replenishment of every tonne of the mined metal to sustain mine life above 25 years at current rate of production

Mine Life (R&R) at Current Rate of Metal Production

25+ Years

Reserves & Resources

460.1 Mt

Investment Case 2

Strategic Investments Boosting Production Capacities

Constant scaling of production volumes instead of following the industry trend of playing with range-bound mining volumes
Significant investments in advanced operational methods and tools to accelerate mine development rate, improve productivity and optimise cost
Collaborations with global experts ensuring efficient project execution across business segments
Agile and swift adaptation to a transforming business environment
Focussed sustainable growth strategy with determined progression towards net-zero emissions and low carbon economy
Optimising usage of natural resources supported by our proven ore deposits
Trained partners and teams for detailed planning of projects ensuring disciplined execution

Refined Metal Production; first time 1 million tonne+

1,032 kt

Mined Metal Production

1,062 kt

Increase in Ore Production

2.5%

Investment Case 3

Maintaining Global Cost Leadership Fuelled by Fiscal Prudence, Agility & Resilience

Continued leadership in the first quartile of the global zinc cost curve, and consistently being one of the most low-cost producers of zinc-lead globally
Ability to continually ramp up volumes and deploy automation and digital initiatives resulting in cost optimisation
Robust earnings before interest, taxes, depreciation and amortisation (EBITDA) margin, strong credit rating and balance sheet – a reflection of our resilient capital deployment strategies
Agile and responsive strategic approach, enabling quick adaptation to business transformation while maintaining the highest levels of operational excellence across the value chain

Revenue from Operations

₹ 34,098 crore

(US$ 4,248 mn)

Total Income*

₹ 35,477 crore

(US$ 4,420 mn)

Zinc CoP

US$ 1,257 per MT

(US$ 4,420 mn)

3-year Average EBITDA Margin

53%

*Total income is inclusive of revenue from operations (including other operating income) and other income

Investment Case 4

De-Risked Business Model with Close Customer Connect to Drive Sustained Growth

Well-diversified innovation-led product portfolio
Collaboration with customers to design products to meet their expectations and specific requirements
Setting up a 30 kt alloy plant under Hindustan Zinc Alloys Private Limited (HZAPL) is a key testimony of our conscious efforts to adopt VAP portfolio as a go-to-market strategy
Contributing towards India’s self-sufficiency via downstream integration by investing in Hindustan Zinc Fertilisers Private Limited (HZFPL)
Expanding the global footprint as part of our geographic de-risking strategy
Large-scale distribution network and long-term connects ensuring improved customer satisfaction and reach

Product Offerings

13

Proportion of VAP

15.5%

Investment Case 5

Sustainability-driven Business with Industry-leading Focus on ESG and Community

Focussing aggressively on Environmental, Social and Governance (ESG), with a well-articulated roadmap towards carbon neutrality
Progressing well towards our 2025 Sustainability Goals with intense commitment towards optimal utilisation of natural resources
Ranked 1^st in Asia-Pacific and globally 3^rd in S&P Global Corporate Sustainability Assessment in 2022 amongst metals and mining companies
A certified water positive company, member of the FTSE4Good Index and S&P Global Sustainability Yearbook 2023 and amongst the top 5% of the most sustainable organisations
First Indian mining company to deploy battery electric vehicles (BEV) in underground mining
Strong governance and risk management framework with ISO certified compliance and cybersecurity
Partnering in Government’s ‘Aatmanirbhar Bharat’ campaign
Comprehensive corporate social responsibility (CSR) outreach, benefitting 1.7+ million people in 237 villages

Dry Tailings Plant

India’s 1st

Renewable Energy Portfolio

354.74 MW

Long-term Renewable Power Delivery Agreement with Serentica Renewables

450 MW

Investment Case 6

Superior Returns to Shareholders

Focussed approach of investing in strategic projects ensuring superior capital allocation with above average IRR, maximising shareholder returns
Better-than-average performance achieved through innovative and proactive measures, such as strategic hedging
Strong digital and automation capabilities, enabling us to ensure on-time delivery and helping us align with the changing ecosystem to stay ahead of the curve and deliver industry-leading growth even in a challenging environment
Strong operational excellence backed by cost optimisation measures, promoting operational efficiencies through meticulous planning and process rationalisation besides targeted sustainable strategies, creating and delivering value to shareholders

5-year Average Dividend Pay-out

149%

Annual Growth in Refined Metal Production*

7%

Annual Growth in Silver Production Volume*

10%

*For 5-year growth trend, click here

In addition to these strengths, our attractive investment proposition is also driven by various proactive measures we have undertaken on a continual basis to drive inclusive, long-term growth and stakeholder value creation. These include hedging as well as investments in strengthening our digital and automation capabilities.

All numbers as on March 31, 2023