• The Company mined metal production from underground mines in Q4FY19 was 245kt, up 24% on account of higher ore production driven by strong growth at Rampura Agucha, Sindesar Khurd & Rajpura Dariba mines. Total mined metal production was down 4% on account of closure of open-cast operations in March 2018. For FY19, mined metal production from underground mines was 936kt, 29% higher from a year ago on account of 27% higher ore production and better grades, even as the closure of open-cast operations caused total mined metal production to decline by 1% y-o-y.

• For Q4FY19, integrated metal production in Q4 was 227kt, down 11% from a year ago, on account of lower mined metal output in first half of the quarter. Integrated zinc production was 175kt, down 15% y-o-y on account of lower mine output. Integrated lead production was up 6% y-o-y to 53kt in line with mined metal availability and a higher lead ratio in the ore. Integrated silver production was a record 191 MT, up 13% y-o-y in line with lead production and conversion of WIP. For FY19, integrated metal production was 894kt, down 7% y-o-y. Zinc production at 696kt was lower by 12% y-o-y due to lower zinc mined metal availability during the year as underground mines ramped up to make up for the closure of open-cast operation and a higher lead ratio in the ore. Integrated lead and silver production were at record 198kt and 679 MT, higher by 18% y-o-y and 22% y-o-y respectively driven by higher lead mined metal production, retrofitting of pyro metallurgical smelter in Q2 to produce more lead in line with higher lead mined metal availability and better silver grades.

• For Q4FY19, zinc metal cost of production before royalty (COP) during the quarter was $987 (Rs. 69,545) per MT, improving by 1% (3% in Rs) from the previous quarter and higher by 7% y-o-y (17% in Rs). The sequential improvement was primarily on account of lower imported coal & diesel prices and higher linkage coal volume, offset by higher mine development expense and lower volume. The y-o-y increase was mainly on account of higher mine development & employee cost, lower volume and rupee depreciation (in case of rupee COP), offset by higher acid & other credits. For the year, COP was higher by 4% (12% in Rs) at $1016 (Rs. 71,003) per MT and was impacted by higher mine development, lower metal volume, higher coal & commodity prices, higher employee cost and rupee depreciation (in case of rupee COP), partly offset by higher acid credits.

• During Q4FY19, LME Zinc prices declined 21% to $2702 per MT, Lead prices fell 19% to $2036 per MT, and Silver prices dropped 7% to $15.6/oz. For FY19, LME Zinc prices declined 10% to $2743 per MT, Lead prices fell 11% to $2121 per MT, and Silver prices dropped 9% to $15.4/oz

The total income from operation declined by 13% to Rs 5,491 crore for fourth quarter ended March 2019. The decline in revenue was primarily on account of lower metal prices and zinc volume, partly offset by higher lead & silver volume and rupee depreciation.

The Zinc & Lead segment revenue, contributing 84% of total revenue, dropped 16% to Rs 4,611 crore, while Silver segment revenue, contributing 14% of total revenue, jumped 17% to Rs 744 crore. The Wind Energy revenue, contributing 1% of total revenue, grew 32% to Rs 29 crore.

Operating margin (OPM) declined to 690 bps to 51%, thus, operating profit (OP) dropped by 23% to Rs 2,789 crore.

At segment level, PBIT of Refined Zinc & Lead segment dropped 40% to Rs 1,607 crore, while Silver PBIT gained 17% to Rs 639 crore. Wind Energy segment PBIT rose 1% to Rs 13 crore.

The other income inclined by 20% to Rs 539 crore. Interest cost rose to Rs 51 crore from Rs 8 crore in corresponding previous quarter. Depreciation cost rose 20% to Rs 553 crore, thus, PBT before EO declined by 24% to Rs 2,724 crore. With NIL EO income during the period as against EO expenditure of Rs 51 crore corresponding previous period, the PBT after EO dropped 23% to Rs 2,724 crore. The taxation outgo decreased 32% to Rs 712 crore. Effective tax rate fell to 26.1% from 29% corresponding previous quarter, thus, the net profit declined by 20% to Rs 2,012 crore.

For the financial year ended March 2019 (FY 2019), the total income from operation of the company dropped 4% to Rs 22,118 crore. OPM decreased by 500 bps to 50.5%, thus operating profit declined by 13% to Rs 10,670 crore. Other income rose 4% to Rs 1,782 crore. With drop in interest cost by 54% to Rs 113 crore but rise in depreciation by 27% to Rs 1,883 crore, the PBT before EO fell 15% to Rs 10,456 crore. With NIL EO income during the period as against Rs 240 crore EO income corresponding previous period, the PBT after EO dropped by 16% to Rs 10,456 crore. The taxation outgo decreased 22% to Rs 2,500 crore. With drop in effective tax rate by 240 bps to 23.9%, net profit fell by 14% to Rs 7,956 crore.

• The announced mining projects are nearing completion and expected to reach 1.2 million MT per annum of mined metal capacity in FY2020.

• Capital mine development increased by 20% y-o-y to 12.4 km in Q4 and up by 12% to 43.1 km for the year.

• At Sindesar Khurd, the underground crusher and production shaft were commissioned in Q4 and ore hoisting from shaft is expected to start next month. The second paste fill plant is under mechanical completion and expected to commission shortly.

• At Rampura Agucha, the second paste fill plant was commissioned ahead of schedule during Q4. The full shaft commissioning is expected to complete by Q2 FY2020 synchronising with the completion of crusher and conveyor system.

• At Zawar, the new 2 Mtpa mill was commissioned during Q4 while the dry tailing plant is under execution and expected to commission in Q2 FY2020.

• The fumer project at Chanderiya is under mechanical completion and is set to commission next month.

• Pantnagar Metal Plant received Environment Clearance (EC) to increase silver production from 600 MT per annum to 800 MT per annum

• In the wake of recent global incidents related to tailing dams, the Company is also reassessing structural integrity of all its tailing dams with the help of global experts.

• Planning for the next phase of expansion from 1.2 to 1.35 mtpa mined metal capacity announced in April 2018 is underway.

Reserve & Resource

During the year, gross additions of 5.4 million MT were made to reserve & resource (R&R), prior to depletion of 13.8 million MT. As at March 31, 2019, the combined R&R were estimated to be 403 million MT, containing 34.6 million MT of zinc-lead metal and 965 million ounces of silver. Overall mine life continues to be more than 25 years.

Contribution to the exchequer

During the year, the Company contributed Rs. 11,563 Crore to the Government treasury through royalties, taxes and dividends, which is 52% of revenue.

Liquidity and investment

As on March 31, 2019, the Company's cash and cash equivalents was Rs. 19,490 Crore invested in high quality debt instruments and the portfolio continues to be rated "Tier –1" implying Highest Safety by CRISIL. During Q3 FY2019, the Company borrowed Rs. 5,000 Crore of short term commercial paper to meet cash flow mismatch for special interim dividend funding requirement. Of this, Rs 3,000 Crore of commercial paper was paid off during last quarter. The net cash and cash equivalents at the end of the year was Rs 16,953 Crore as compared to Rs 20,395 at the end of FY2018.

The Company expects both mined metal and finished metal production in FY2020 will be higher than last year and expected to be about 1.0 million MT. We expect to complete the underground mine expansion plan announced in early 2013 towards the end of Q2 of this year, quadrupling our mined metal production capacity to 1.2 million MT per annum.

Zinc cost of production in FY2020 is expected to be under $1000 per MT. The guidance of FY2020 silver production is in the range of 750 MT to 800 MT. The project capex for the year will be in the range of US$350 to US$400 million.

The scrip closed trading at Rs 272.15 on 2nd May 2019 on the BSE.