Hindustan Zinc Ltd. share price target

HZL has a huge reserve base, which provides strong earnings visibility. During the year, total ore reserves increased from 92.6 million tonnes (MT) at the end of FY19 to 114.7 MT at the end of FY20, while mineral resources totalled 288.3 MT. Total R&R; was unchanged at 403 MT from a year ago as ore consumed during the year was replenished. Total contained metal in ore reserves was 7.95 MT of zinc, 2.07 MT of lead and 256.2 million ounces of silver. The mineral resources contain 15.87 MT of zinc, 5.93 MT of lead and 641.8 million ounces of silver. At current mining rates, the R&R; underpins...

Hindustan Zinc (HZ) reported EBITDA tad below our estimates by 3% due to lower volumes. While, earnings beat consensus estimates by 6%. HZ missed its guidance on volumes and ore grade over last 3-4 years due to weaker than assessed ore grade. Ore grade has fallen by ~30% in last 5 years due to lower grade of new mines and reduced share of Rampura Agucha (RA) mines. As the new shafts at both RA and Sindesar Khurd (SK) mines...

Hindustan Zinc (HZ)'s 3QFY21 results were strong, as expected, with EBITDA up 43% YoY on higher volumes and prices. While silver business remained strong with EBIT of INR10.1b (37% of total), zinc realized premiums recovered to pre-COVID levels as the share of domestic volumes improved in 3Q. As major projects near completion, we expect 9% CAGR in HZ volumes over FY21-23E, driving an 18% CAGR in EBITDA. However, we believe this growth is factored in the current valuation and hence we rate it Neutral....

Registered Office:Rukmini Towers, 3rd& 4th Floor, # 3/1, Platform Road, Sheshadripuram, Bangalore - 560 020,...

Registered Office:Rukmini Towers, 3rd& 4th Floor, # 3/1, Platform Road, Sheshadripuram, Bangalore - 560 020,...

In Q1FY21, standalone revenue fell 20.8% YoY to Rs. 3,898cr, mainly due to weaker revenue from Zinc (-27.0% YoY, 65.7% of total revenue) and Lead (-11.7% YoY, 15.5% of total revenue). The drop in revenue was attributable to reduced prices (Zinc LME: -29.0% YoY and Lead LME: -11.2%YoY), lower volumes (impacted by the COVID-19 pandemic) and shrunk premiums (due to adverse domestic-export mix), partly offset by rupee depreciation. Mined metal production dropped 5.2% YoY to 202kt owing to outage in April during the lockdown. Saleable Silver production decreased to 117mt (-26.4% YoY) due to delayed stabilization of DSC lead smelter and increase in WIP,...

Hindustan Zinc (HZ) reported earnings in line with ours/consensus estimates. HZ missed its guidance on volumes and ore grade over past couple of years due to delay in commissioning of shafts and weaker than assessed ore grade. As the new shafts at both Rampura Agucha (RA) and Sindesar Khurd (SK) mines commenced hauling of ore, we expect significant improvement in quality of operations with better visibility on production and lower costs. In last five years since FY15, ore grade has fallen by ~30% to 7.5% due to fall in...