Hindustan Zinc Ltd. share price target

HZL's revenue was impacted by the decline in sales volume and prices of zinc and lead, *over or under performance to benchmark index with additional pressure coming from planned maintenance work. However, its future growth trajectory is expected to be supported by a favourable outlook for silver prices, a robust cash and cash equivalent and a strategic investment plan. Furthermore, the implementation of cost-saving measures is expected to bolster the company's resilience in a challenging operating environment. While global economic uncertainties persist, the company's exposure to the Indian market, which is exhibiting strong domestic...

1QFY26 revenue declined 4% YoY/15% QoQ to INR77.7b, in line with our est. of INR75.7b. The decline was primarily driven by lower volumes and low commodity prices, offset by higher prices of silver and by-products and stronger dollar.

HZL’s Board has approved a growth capex of ~INR120b (funded through internal accruals and debt) to expand the zinc smelting capacity by 250ktpa at Debari, along with a mines capacity expansion of 330ktpa (Rajpura Dariba - 2.5ktpa and Zawar - 0.8ktpa).

4QFY25 revenue stood at INR90.9b (+20% YoY/+6% QoQ) vs. our estimate of INR85.5b. Revenue growth was driven by high metal production, strong zinc and silver prices, stronger dollar, and strategic hedging gains.

Hindustan Zinc (HZ)’s revenue was INR86b (YoY/QoQ: +18%/+4%) vs. our estimate of INR82b.

Regaining momentum

In 2QFY25, revenue stood at INR83b (+22% YoY/+2% QoQ) against our estimate of INR78b. The YoY growth was driven by better metal and silver volumes and zinc and silver prices.

Hindustan Zinc’s (HZ) 4QFY24 revenue stood at INR75b (down 11% YoY) vs.
our est. of INR80b. The sequential revenue growth was driven by better zinc
volumes, which offset lower lead & silver volumes and lower metal prices.

Revenue stood in line at INR88b (up 27% YoY and 10% QoQ) in 4QFY22, led by higher LME prices, but was partly offset by flat lead prices. EBITDA stood in line at INR50b (up 28% YoY and 14% QoQ). Power and fuel costs stood at INR8b, up 10% QoQ, led by higher coal prices. Other expenses rose 11% QoQ to INR19b, but was partly offset by inventory accumulation. PAT grew 18% YoY and 8% QoQ to INR29b, marginally below our estimate of INR30b due to lower than estimated other income and higher taxes, which Financials & valuations (INR b)...

Hindustan Zinc (HZL) reported yet another quarter of strong EBITDA at INR43.7b, up 31% QoQ, driven by 23% higher metal sales and 12% rise in Zinc LME price. Silver sales also increased 14% QoQ to 173 tonnes. We believe the stock already priced in 1.2mt of metal sales for FY23, but it is not factoring in the probability of acquisition of the international Zinc assets of Vedanta at the peak of the zinc cycle. This could impact the quality of the assets, earnings and balance sheet of the company. We maintain our Neutral rating with a TP of INR311 valuing HZL at 7x FY23 EV/EBITDA....

We expect company to gain from higher production, improved prices, and cost control measures. However, given limited upside potential, we reiterate our HOLD rating on the stock with a revised target price of Rs....

HZL has a huge reserve base, which provides strong earnings visibility. During the year, total ore reserves increased from 114.7 million tonnes (MT) at the end of FY20 to 150.3 MT at the end of FY21 while mineral resources totalled 297.6 MT. Total R&R; increased to 448 MT as HZL replenished more than it consumed during the year. Total contained metal in ore reserves is 9.16 MT of zinc, 2.55 MT of lead and 295.5 million ounces of silver. The mineral resources contains 14.9 MT of zinc, 6.3 MT of lead and 618.7 million ounces of silver. At current mining rates, the R&R; underpins metal...

Growing demand, recovery in prices and cost optimization should drive company's growth further. We maintain our rating to HOLD on the stock with a rolled forward target price of Rs. 301 based on 12x FY23E PE. Higher volumes led healthy revenues In Q3FY21, company's revenue grew 27.9% YoY (+6.9%QoQ) to Rs. 5,915cr, largely driven by higher metal volumes and prices. Zinc revenue rose 21.4%YoY to Rs. 4,744cr (+11.6% QoQ) supported by higher Zinc (+6% YoY) and lead volume (+30% YoY), owing to gradual recovery in China as manufacturing activities coming back to...