Thank you very much. We will now begin the question -and-answer session. Our first question comes from the line of Pallav Agarwal with Antique Stock Broking.

Congratulations to Mr. Arunji and best wishes to the incoming management team. So I had a couple of questions. First one was on the power and fuel costs. So on a sequential basis, it has gone up despite metal production being lower, and I think the RE proportion of energy also was better compared to the fourth quarter. So any particular reasons for the increase in power and fuel cost on a sequential basis?

So the power and fuel cost during the quarter has dincreased majorly due to our materialization of linkage coal, which is slightly lower due to the various reasons, including the mine conditions from where we take coal. On top of it, there is an impact of imported coal, which is slightly at a higher cost as compared to earlier, although we have consumed more RE power. So this quarter is slightly higher on the power and fuel cost.

36% compared to -- it was 54% last year, 64% in quarter 4.

Sure, sir. Also, if you would just on, I think as a policy, we never used to sell concentrate earlier. So are we like doing this on a temporary basis still the smelting capacity...

We still don't sell concentrate. We still have the same policy that we don't sell concentrate. However, if you recall, when we commissioned the 1 million ton capacity, new mill in RD mine. So in the initial days, during stabilization of the plant, we have produced lots of lead concentrate which were slightly inferior grade and unusable in our own smelters. So we thought we would make good of that with the good grades that we'll produce later on. But looking at the price of silver and the good prices that we are doing, we do not want to use -- we don't want to lose the opportunity by derating the smelter by using inferior grade of concentrate. So that stock which we are carrying for a long time. That's what we sold in the market taking opportunity of the high LME, and we realized almost silver equivalent of 9 tons through the sale and about 6 KT of metal through the sale. So that's how we have made good of the situation where the old stock we disposed off, creating value for all of us.

So has the stock been exhausted, sir? Or we still have some of that old inventory with us?

Almost we are segregating, maybe some amount still be there, but we'll figure out if we can use it now. Now that the smelter shutdowns are over, capacities are back, and we wont like to keep the smelters empty. So we will not immediately sell unless we find that the mine production are at such a level that the smelters are not starving of any amount then and there only.

Sure sir. Also, if you could just share the absolute revenue number of the concentrate sales, sir?

So, INR315 crores in the revenue from concentrate.

Okay. So finally, just so are we expecting any production for the rest of year. We shouldn't have any further shutdown or a maintenance plan, right? So for the remainder of the year.

So roughly, we have given a guidance of 1.1 million tons for the year, right? And we have done 260 KT just now. So yes, now everything is back, and we will -- we won't have any further shutdown, and we will deliver on our commitment of 1.1 million tons.

Our next question comes from the line of Suman Kumar with PhillipCapital.

Congratulations on a really good set of numbers. So my first question is considering the kind of production for Q1, what we have achieved, what is the confidence that we will achieve the targeted production guidance? And would the management try to even re vise or change the guidance for the year. That would be my first question.

No, no. We have done 260 KT. Even on a straight line method, we are already at 1,040, right, and we have given a guidance of 1.1 million ton only. So it's only little -- so we are absolutely

confident of producing typically quarter 2, quarter 3 as we go forward, the production numbers are the highest and quarter 4, normally, we touch even close to 280, 290 KT. So I don't see any reason why we will have any difficulty in reaching 1.1 million ton.

And second, sir, what is your expectation of what is the net cash position of which we will be exiting FY27?

So we are -- at this point of time, we are a net cash company and based on the volumes we have predicted and the prices which are going on in the market. So we believe that we are going to be net cash company.

Okay. Sir, just 1 more question. During the -- in the notes to accounts, specifically in point 5, there have been mentioned that SEBI had flagged a couple of observations on related party transactions. And although there has been no financial penalty or restriction or any kind of imposition on the group, but it has been mentioned that in line with SEBI directions, several corrective measures have been taken. So could you please throw a little bit of light on this, please?

So it's -- the way it operates is all the related party transactions, we take a omnibus approval and staying with that limit we operate. Suppose an omnibus approval, I had say, INR300 crores per metal quantity of. I'm just giving a number of, say, 100,000 tons, right? So the operating people always focus on the 100,000 tons but now if the LME increases, the value crosses INR300 crores. Then that is what perhaps now -- internally, the SOP, we will do is at the 80% level, alarms will be generated, that we are about to cross 80% of the value approval. So go back to Board and inform the Audit Committee and take that approval. Otherwise, there is no bridge as such.

I just have one more question that in the presentation, when we are mentioning that the zinc smelter and the lead smelter that is close to about plus 600 KT of metal capacity that is in conceptualization stage. So could we have a time line as in like once the Board approval happens, what is the time line or how many months are we looking at for this capacity to come online? And what would be the approximate capex outlay for this?

So this capex outlay, we just can't -- because we are now going through the tendering process and maybe another 1 months’ time, we would know exactly. But if I do a straight line method, for a 250 capacity, we see around INR12,000 crores. So we can see, including mines, somewhere around 650 KT will be about 2.5x of that, so roughly about INR24,000-25,000 crores. But yet, I will wait for that tendering to be done. And second, we are estimating a time line of 36 months of construction period post approval by the board, which we expect by quarter 3 of this year, we will move for board approval.

Our next question comes from the line of Manav Gogia with Yes Securities.

Sorry to interrupt, Manav, but your line seems to be slightly muffled, request to please check the mode that you're using.

Is it better now?

Yes. Much better. Please go ahead.

Sir, my first question is in line with the previous participant on the operational guidance. So if you look at refined metal looks to be achievable for whatever guidance you had given for 1.1 million. But when we look at the volumes of silver, right, how s hould one look over the next 3 quarters? Because if we have to attain the 680 tons target, then we'll have to average at about 175 tons a quarter now. So what would your view be on this considering that it has come down and now zinc prices are also quite attractive?

If you look at the silver production, actually, the silver grade this quarter has been better, right? So in spite of a better grade, we have just produced 149 tons, so a rough estimate of 10 tons to 15 tons of silver would be in the -- locked up in the WIP. So it's not -- and one -- and if you take out the concentrate sale, then actually 158 tons of silver that we have -- value has been extracted. Now going forward, typically, quarter 2, up till quarter 4, we ensure that the mine development is such will hit even better PPM ore for silver, and we maximize in quarter 4. So looking at that, we can surely say it will not be difficult to achieve the guidance numbers.

Okay. Understood. So second question would be, if you could let me know if there are any current hedges which are open for FY27? And how should one be looking at the hedging policy going forward?

So at this point of time, we have a 48 KT of zinc, which are open at the rate of USD3,162 per ton, and silver, 34 tons at the rate of 63 per ounce. As of now, we are not doing any hedging considering the volatility in the market and at the appropriate time, whenever we do, we will update.

Okay. So we did these hedges in Q1 or these carry forward from Q4?

No. No, this year, we haven't done any hedging.

We haven't done as of now . Okay. Sir, one last question I wanted to also ask was. So this is related to your DAP fertilizer plant. And I mean, since it is expected to commission in Q2, and we already out over in Q2. So can we get a definitive timeline on what is the targeted date or the month? Can you also shed some light on the unit economics is expected to look out of the same?

No. So what will get commissioned in Q2 is the phosphoric acid portion of the of the fertilizer plant. So it is the phosphoric acid plant that should be commissioned. And if you note that for the fertilizer plant, we are yet to complete the whole construction because the environment clearance and other regulatory approvals are pending.

So once that is completed, then only we'll move to fertilizers. So as of now, in Q2, you can expect phosphoric acid plant to be completed and maybe some of that sulfuric acid will be converted to phosphoric acid for better realization in the market.

Okay. And what will be the time line for the fertilizer plant then?

Fertilizer plant should come in place by quarter 1 of next financial year.

Our next question comes from the line of Pratim Roy with 360 ONE Capital.

Congratulation on the strong quarter to the whole team. I have few questions. Firstly, there are several media article s on government of India selling the stake in Hindustan Zinc. So is there any update which can be shared on this regards? That is the first question.

Yes, it is for the government to give the update. We really can't get any update on what government will do.

Okay, sir. Okay. And secondly, is there any change in the dividend policy after the demerger happened at Vedanta. So how should we see the dividend during this year?

Dividend policy, there is no change.

There's no change in the dividend policy. We have a minimum 30% of our profit and 5% of reserves as per the policy we pay, and during the first quarter, we have paid INR11 per share already, and it's a matter of board. So at the appropriate time, whatever decision is being taken, we'll be updating it.

Our next question comes from the line of Anirudh Nagpal with JM Financial.

Congrats on a great set of numbers. So my only question is that recently, company won the REE block at Karnataka. So can you please share the action plan or the details of the block? And by when should we expect the production to come? So how shall we see the lead concentrate sales? And will it be coming in the coming quarters? So yes, that's the question.

So this is REE and Yttrium block. And if you know that Yttrium is used mostly for various electronic purposes, like red LED lamps that we see. Red LED is made out of Yttrium, phosphor element in that red LED. Also is used for various other medical purposes as well. So it's a very important metal for India's development. Now the question is, we have just got the block at G2 level. immediate task is exploration Typically, it would take 2 years to 3 years for exploration, establishing the reserve resource base and then doing the mine plan. You can see -- you can say the mining and then metalization will take at least an ywhere between 5 to 6 years. So that means maybe 2031 -32 would be the first time the production will come to the market.

So first question is on the cost. So on the USD50 per ton reduction quarter-on-quarter, can we share some breakup as to what are the drivers and quantify?

So during the quarter, our COP is broadly in line with the guidance we have given, which is 975 to 1,000, and the additional benefit is because of the by-product realization, which is higher than this.

Okay. Okay. So between, say, this quarter and last year, what would be the incremental delta from byproduct realization? Is it possible to explain?

So byproduct, we are selling in through the auction and whatever price we are realizing, it is getting offsetted in COP, cost of production. So based on that, the numbers which are there is reflecting in our financials.

Sure sir. Second question is on the zinc processing plant. If you could just share some details as to what is the recovery expected on full utilization and what is the time for the ramp -up? And same with hot -- yes..

Which zinc processing plant you are talking about? Is it tailing recycling plant?

Yes, yes, tailing recycling.

Are you talking about the tailing recycling plant. For tailing recycling, we have just started the construction. So it will be another 24 months before the facility can be constructed. And we expect about 30, 35 kt of zinc to be produced out of that.

Okay. Okay. And does it take to ramp up or say, in 3 years’ time we can get this output?

Tailing reprocessing apart from in 1 mine in Australia, nobody has done. So of such capacity, I would expect it would have a ramp-up period of anywhere between 6 to 8 months. Sumangal Nevatia Okay, understood. And just lastly, with the fertilizer plant, what is the total capex we spent till now, till 1Q?

Around INR500 crores we had already spent.

The next question comes from the line of Tejas Pradhan with Citigroup.

Just wanted to recheck on the hedge number. You -- I missed the quantity for zinc. The price, I think, was 3,162, right?

So zinc quantity is 48,000 tons, 48 KT.

48 KT. And silver was 34 tons at USD63, right?

Right.

So the hedge losses are to the tune of INR200 crores.

INR200 crores. And the full year capex guidance and the capex spent in 1Q?

So the guidance for the year is on the growth project is around USD500 million to USD600 million we are expecting. And during the quarter, we have spent around INR800 crores.

INR800 crores.

We will now take one last question, which will be from the line of Pinakin with HSBC.

So just trying to understand the sulfuric acid prices have been very, very strong. I mean, they are up 200% on a year -on-year basis and prices have again recovered. So is it fair to say that the cost of production because you report cost of production net of byproduct realizations would further reduce in the second quarter?

I guess in the second quarter, we have just done 260 KT of metal. In second quarter, if I had to meet 1.1 million ton guidance should cross around 280 KT, right? So that means more mining has to happen. And in that case, automatically on the input side, the cost will go down. And if you produce more metal and more acid will be produced. And if the prices remain at current level, the cost is supposed to be better unless we are struck by higher input commodity prices, which is also a likelihood.

Sure. And just a clarification. If I take royalty as a percentage of revenues, it is at multi -quarter lows. This will essentially be because of higher sulfuric acid revenues, right, where you don't have to pay a royalty?

Your voice is muffled. I'm unable to hear probably.

No. So my point was that the royalty as a percentage of revenues is at a multiyear low. This would essentially be because of sulfuric acid revenues being booked under revenues where you don't pay a royalty. Would that be correct?

Which royalty? You were talking about mineral royalty?

Mineral royalty, as the P&L item, the percentage of revenues?

Sulfuric acid, there is no royalty as per law because it's not any mineral product. It's something has to be produced because of environmental concerns, you cannot get sulfur -- sulfur dioxide out in the environment. right? So -- but the mineral royalty for other is a percentage of the price that is the LME that is set. So automatically, it becomes a percent, not revenue in absolute terms, but in the price in absolute terms.

Thank you, operator, and thank you all for joining today's call. Before we conclude, I would also like to take this opportunity to express our sincere gratitude to Mr. Arun Misra for his outstanding leadership and invaluable contribution to Hindustan Zinc's growth journey. Under his leadership, the company achieved several significant milestones and further strengthen its position as a global leader in the zinc industry. On behalf of entire Hindustan Zinc family, we thank him for his guidance and wish him continued success in his future endeavors. Further, we are pleased to share that we have published our fourth integrated Annual Report which provides a comprehensive overview of our strategy, financial and operational performance, sustainability initiatives and long-term value-creation journey. As always, our complete reporting suite is available on our website. We welcome your feedback and suggestions as we continue to enhance the quality of our disclosures. Should you have any further questions or require additional information, please feel free to reach out to the Investor Relations team. Thank you, and have a great day.

Thank you. On behalf of Hindustan Zinc, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.