Low PE, High ROCE: World's Largest Integrated Zinc Producer Unveils Rs 40,000–50,000 Crore Capex Outlay; FII Stake Doubles

On Friday, Indian benchmark indices ended higher, with the Nifty 50 index gaining 0.39 per cent to 24,270.85. Amid the broader market strength, Hindustan Zinc share price traded at Rs 536.55, up 1.48 per cent, after the company outlined its long-term growth strategy during its 60th Annual General Meeting (AGM) held on June 29, 2026.

Hindustan Zinc Announces Rs 40,000–50,000 Crore Expansion Plan

During the 60th Annual General Meeting, Hindustan Zinc unveiled its ambitious 2X growth strategy, under which the company aims to increase its annual metal production from approximately 1.1 million tonnes to 2 million tonnes over the next five years.

To achieve this target, the company plans to invest Rs 40,000 crore to Rs 50,000 crore, equivalent to nearly 22 per cent of its current market capitalisation of Rs 2.27 lakh crore, making it one of the largest expansion programmes in the Indian metals sector. The expansion will be driven through brownfield expansions, de-bottlenecking initiatives, new SMElters and expanded mining operations.

Phase 1 Approved With Rs 17,000 Crore Investment

The Board has already approved Phase 1 of the expansion, involving an investment of Rs 17,000 crore.

The first phase includes the Construction of a 250,000 tonnes per annum integrated zinc smelter at Debari and India's first zinc tailing reprocessing plant, which will convert legacy mine waste into valuable metal resources. The company also plans to strengthen exploration activities to maintain a mine life exceeding 25 years, supporting long-term production growth.
Also Read - Vedanta-Backed Zinc Manufacturer Reports Highest-Ever First-Quarter Mined Metal Production; Shares Jump 2%

Hindustan Zinc Record FY26 Production

The company reported its highest-ever mined metal production of more than 1.1 million tonnes during FY26. It also achieved its second-highest refined metal production of around 1.05 million tonnes.

Hindustan Zinc further maintained its position among the world's lowest-cost zinc producers, with the cost of production (excluding royalty) falling to a five-year low of USD 959 per tonne.

Expansion Into Critical Minerals and Silver

As part of its long-term strategy, Hindustan Zinc plans to evolve into a diversified multi-metal and technology-led company.

The company has secured mineral blocks for tunGSTen, potash, rare earth elements in Uttar Pradesh and halite, strengthening its presence in the critical minerals segment. It also plans to increase annual silver production to over 1,500 tonnes once its metal production reaches the 2 million tonne target.

Management stated that future operations will increasingly leverage artificial intelligence, automation and advanced analytics, with the vision of transforming Hindustan Zinc into a technology-led metals company.

Hindustan Zinc Funding Strategy

Management indicated that the expansion is expected to be funded primarily through internal accruals. With annual profit after Tax currently in the range of Rs 12,000 crore to Rs 13,000 crore, the company expects to generate around Rs 60,000 crore to Rs 65,000 crore over the next five years, while continuing its Dividend policy. It also retains the flexibility to raise debt if required.

About Hindustan Zinc

Hindustan Zinc Limited, a Vedanta Group company, is the world's largest integrated zinc producer and among the leading global silver producers. The company operates integrated mining and smelting facilities in Rajasthan and supplies zinc, lead and silver to customers across more than 40 countries. Foreign Institutional Investors (FIIs) more than doubled their stake in the company, increasing their holding from 1.54 per cent in Q3 FY26 to 2.39 per cent in Q4 FY26

Hindustan Zinc currently has a market capitalisation of Rs 2,26,794 crore. The stock trades at a Price-to-Earnings (P/E) ratio of 16.5 and delivers a Return on Capital Employed (ROCE) of 69.2 per cent, reflecting strong profitability and capital efficiency.
 
The company is expanding beyond its core zinc business through investments in critical minerals, silver production and technology-led mining solutions, supporting India's long-term energy transition and industrial growth.

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Disclaimer: The article is for informational purposes only and not investment advice.