Apart from rise in prices (which will lead to higher realisations), a better volume growth is also on the cards for zinc producers this fiscal. In the first four months of the current fiscal (April-July), there has been a 3.29 per cent rise in zinc production to 52,515 tonnes as against 50,841 tonnes in the corresponding period last year. Hindustan Zinc produced 43,264 tonnes as against 40,182 tonnes in the corresponding period last year.

Hindustan Zinc currently trades at Rs 19.60 after being range-bound at Rs 17-21for the last two-three months.

Binani Industries, which fell to Rs 38.75 after touching a high of Rs 55.30 in August-end, is on an uptrend once again. Thinly-traded, Indo Zinc is already on the rise; more than doubling its share value from Rs 2 to over Rs 5. However, this rise more to do with the lifting of the ban on import of zinc ash rather than the increase in zinc prices.

Hindustan Zinc and Binani Industries have a production capacity of 0.14 mtpa and 30,000 tpa, respectively, and together account for a substantial portion of the domestic market. Hindustan Zinc operates 6 mines and four smelters, spread over Rajasthan, Bihar, Andhra Pradesh and Orissa. The public sector is now planning to increase its capacity at both Debari and Vishakapatnam by 10,000 tpa each. Binani Industries Ltd is the largest zinc producer in the private sector.

Financially, the first-quarter of fiscal 2000 has been better for Hindustan Zinc, after a lacklustre performance in the full-year 1998-99. Turnover has risen by anencouraging 18 per cent from Rs 317 crore to Rs 380 crore. Net profit has gone up from Rs 25 crore to Rs 28 crore. Although margins at the operating level have fallen in the first-quarter, they should improve with the rise in zinc prices.