Hindustan Zinc Ltd. share price target

Hindustan Zinc reported an EBITDA of INR 23.3bn, in-line with JMFe. EBITDA declined 23% YoY, driven by lower zinc volumes (17% YoY) and higher CoP. Zinc volumes declined, driven by transition to underground mining leading to lower grades and higher strip ratio. CoP increased YoY, driven by lower zinc volumes, higher thermal coal costs and INR depreciation. Near term zinc price outlook remains steady, driven by a) ILZSG deficit forecast of 322kt in CY18 and b) multi-year low warehouse inventory (224kt of LME+SHFE inventory). The company has declared a strong interim dividend of INR 20/sh (div. yield of 7.1%). We remain positive on HZL given its presence in the lower end of the global cost curve facilitated by high...

22 October 2018 EBITDA was down 14% QoQ to INR23.3b (in-line) in 2QFY19, led by an 18% decline in zinc LME and lower zinc volumes, partially offset by 5% depreciation in the INR and higher byproduct revenue. Tax rate was lower by ~600bp QoQ to 20.2%. PAT declined at a slower rate of 5% QoQ to INR18.1b. Mine production increased 10% QoQ, but refined metal production declined 1% QoQ due to lower availability of concentrate in early part of the quarter. Cost of production (CoP) remains high. It increased by 4% QoQ in INR terms and declined 1% in USD terms to USD1,034/t (excluding royalties). CoP is likely to decline in 2H on account of operating leverage and the start of vertical shafts. Mine production is expected to be 17% higher in 2H v/s 1H. Most projects (vertical shafts at RA+SKM, mills at SKM+Zawar and fumers) which should increase capacity to 1.

We downgrade Hindustan Zinc (HZL) to Hold with a revised TP of Rs275 as weakening price outlook for LME Zn/Pb led by sharp increase in mining output globally is likely to result in a balanced zinc market in CY19 thereby reversing the deficit position seen since CY16. We like HZL for its attractive asset base, growing volumes but see earnings growth remaining muted with lower LME realisations. Valuations appear rich on the revised lower earnings and don't leave much room for any disappointments on volume/cost front. Metal volumes subdued due to mismatch in MIC availability: MIC production...

Hindustan Zinc's (HZ) intent to ramp up its mined-metal capacity to 1.5MT in the medium term through expansion of SK and Zawar mines and taking several initiatives to curtail cost of production, is expected to improve its operating leverage. In the near term, FY19E metal production will be higher than FY18 as production improves in subsequent quarters led by ramp-up of...

Revenue fell by 15.41% to Rs. 5310.0 Cr in Q1FY19 when compared to the previous quarter. Hindustan Zinc Ltd Q1FY19 results Comment

ICICI Securities Ltd | Retail Equity Research Zinc sales volume for the quarter came in at ~170000 tonne, down 10.5% YoY, 19% QoQ (our estimate: 175000 tonne). Lead volumes were at ~42000 tonne, up 23.5% YoY, down 16% QoQ (our estimate: 40000 tonne) while silver volumes came in at ~141000 kg, up 28.2% YoY, down 15.6% QoQ (our estimate: 135000 kg). Subsequently, the company reported an operating income of | 5310 crore, up 16% YoY, down 15.4% QoQ, (our estimate: | 5178.3 crore)...

We upgrade Hindustan Zinc (HZL) to Buy (vs Hold earlier) as we like HZL for strong zinc market fundamentals, its plans to expand output to 1.2 mtpa through transition to underground mining through shafts being on track for FY20E and likely cost economies. We believe that recent correction in zinc prices have little to do with fundamental factors and have been driven by global trade friction which in turn is likely to be short lived. The resultant stock price correction has led to...

Revenue grew by 5.99% to Rs. 6277.0 Cr in Q4FY18 when compared to the previous quarter. Hindustan Zinc Ltd Q4FY18 results Comment

Hindustan Zinc reported a healthy set of Q4FY18 numbers. The performance was above our estimates. HZL reported operating income of | 6277 crore (up 0.3% YoY, 6.0% QoQ, vs. our estimate of |6151 crore). Zinc sales volume for the quarter came in at ~210000 tonnes (down 3.2% YoY, up 5% QoQ, in-line with our estimate of ~210000 tonnes). Lead sales volumes came in at ~50000 tonnes (up 6.4% YoY, 8.7% QoQ, higher than our estimate of ~47000 tonnes). While the silver sales came in at ~167000 kg (up 23.7% YoY, 26.5%...

CoP declined 9% QoQ to USD925/t on operating leverage and an increase in linkage coal, but increased 16% YoY due to higher coal and diesel cost. Adj. PAT grew 12% QoQ (-18% YoY) to INR25.6b (est. of INR26.6b). PAT is...