Hindustan Zinc Ltd. share price target

21 July 2020 Revenue declined 9% QoQ (-20% YoY) to INR39.9b (v/s est. INR37.8b), primarily due to decline in volumes (208kt, -6% QoQ), Zinc LME (-8% QoQ) and premiums offset by currency depreciation (5%). Hindustan Zincs (HZ) 1QFY21 results reflect impact of the COVID-19 led shutdown, lower LME and adverse sales mix (higher exports). EBITDA was down 14% QoQ to INR15.8b (6% higher than est.), aided by lower costs. However, PAT inched up 1% QoQ to INR13.6b on higher other income (v/s est. We expect HZs EBITDA at 11% CAGR over FY20-22E despite lower LME, primarily on ~10% volume CAGR to 1,034kt. Maintain Derived Zinc realizations declined 11% QoQ to USD2,070/t (v/s 8% decline in LME zinc) due to lower realized premiums, which in turn was on account of higher exports (70% of volumes v/s normal level of 25%).

On account of Covid-19, the company halted operations from March 22, 2020 and gradually restarted operations from April 8, 2020. All mines and smelters of HZL were operational in a couple of weeks. In April 2020, HZL's mines and smelter were ramped up to 40% and 80% of capacity,...

As one of the largest producers of zinc, lead and silver in the world, Hindustan Zinc is well positioned to reduce India's dependence on imports and take on the mantle of creating a sustainable metal value chain. With a share of over 75% by volume, it enjoys a dominant position in the domestic zinc market. HZL's overall reserves and resources ensure a long-term mine life of over 25 years even though they reduced to 403 million MT in FY19 from 411 MMT in FY18.Company produced 13.8 MMT of ore in FY19, supported by a 27% on yearly basis increment in ore production from underground mines. However,...

Q3FY20 witnessed weakness in Zinc prices, and decline in production activities. However, we expect recovery in the last quarter and maintained our HOLD rating on the stock with a revised target price of Rs. 228 based on 11x FY22E P/E. Production challenges weigh on Q3 performance In Q3FY20, revenue from operations fell 15.7% YoY to Rs. 4,672 cr mainly due to weaker revenue from Zinc (-17.6% YoY, 67.7% of total revenue), and Lead (-21.1% YoY, 14.0%), partially offset by slight improvements in Silver (1.9% YoY, 14.8%). Zinc...

Hindustan Zinc reported a steady set of Q3FY20 numbers wherein topline, EBITDA and PAT came in broadly in line with our estimates. For the quarter, zinc sales volumes came in at ~172000 tonnes (up 2% QoQ & down 8% YoY), lead sales volume came in at ~42000 tonnes (down 5% QoQ, 22% YoY) while silver sales volume came in at ~154000 kg (up 14% QoQ, down 13% YoY). Topline was at | 4672 crore (up 4% QoQ, down 16% YoY) in line our estimate of | 4688 crore. EBITDA came in at | 2289 crore (up 8% QoQ, down 19% YoY), broadly in line with our estimate of | 2317 crore. EBITDA...

Earnings visibility continued to remain weak due to deteriorating ore grade last one month due to production restrictions in China and improvement in sentiments related to USA-China Trade war. However, we do not see prices...

21 January 2020 3QFY20 results broadly reflect Hindustan Zincs (HZL) continuing challenges in ramping up production. While mined metal production did recover (+4% QoQ), it was on a low, seasonally weak base. Revenue/EBITDA was up 4%/8% QoQ (in-line). We expect volumes to recover in 4QFY20 as production issues recede with ramp-up from SK mines. We build in 17% QoQ improvement in EBITDA for 4QFY20 on higher volumes and lower costs. However, at 6x FY21E EV/EBITDA, this benefit is well baked in. Maintain HZLs EBITDA was up 8% QoQ at INR22.9b (in line with est) on the back of some sequential recovery in volumes. Refined metal production rose 4% QoQ to 219kt. Revenue also increased 4% QoQ on higher zinc/silver volumes and slightly better LME prices. PBT came in at INR21b (flat QoQ). PAT, though decreased 22% QoQ to INR16.2b (5% lower than est.) as 2QFY20 had deferred tax credits of INR3.65b.

and processing of minerals. Hindustan Zinc produces refined zinc, lead and silver metal through their fully integrated operations comprising of mines, smelters, captive power plants and refineries. The refined metal products are sold primarily in India and surplus' production is exported all over the world. HZL's operations include five zinc-lead mines, four zinc smelters, one lead smelter, one zinc- Sector Outlook...

Healthy reserve base to provide earnings visibility HZL has a huge reserve base, which provides strong earnings visibility. During the year, gross additions of 5.4 million tonnes (MT) were made to reserve and resource (R&R;), prior to depletion of 13.8 MT. As on March 31, 2019, the combined R&R; was estimated to be 403 MT, containing 34.6 MT of zinc-lead metal and 965 million ounces of silver. HZL's overall mine life...

29 October 2019 Hindustan Zincs (HZL) EBITDA of INR21.2b (-15% QoQ) was in line with our estimate of INR21.1b as the impact of lower metal volumes (-1% QoQ; 5% miss) was offset by higher- than-expected zinc premiums. PBT of INR20.9b exceeded our estimate by 7% due to higher other income (INR5.9b) led by MTM gains on investments. PAT too increased 18% QoQ to INR20.8b (29% beat), driven by deferred tax credits of INR3.7b given the change in tax law. Geo-tech issues at SK mine continued, resulting in lower total mine production (-6% YoY). A new ore body of the mine encountered faults, necessitating a change in the mine plan and also a shift to lower-grade ore. Kayad mine too witnessed thinning out of ore body, leading to lower grades. Overall, grade slipped to 7.2% of ore mined (v/s 7.3% in 1QFY20 and 7.