Hindustan Zinc Q1 Results Review - Earnings Inline, Remains Expensive At Current Levels: Systematix

Systematix Research Report

Hindustan Zinc Ltd.’s Q1 FY25 revenue of Rs 81.3 billion (+11.6%/+7.7% YoY/QoQ) was in line with our estimate. Ebitda of Rs 39.5 billion +17.9%/+8.1% YoY/QoQ was 1.7% below our estimate. Ebitda margin during the quarter improved by 257 basis points/20 bps YoY/QoQ to 48.5%.

At 211kt, zinc volumes were higher by 1% YoY, but fell 4.5% sequentially. Zinc/lead prices averaged at $2,833/tonne (+11.5%/+15.6% YoY/QoQ) and $2,167/tonne (+2.3%/+4.3% YoY/QoQ), respectively, during the quarter. This price increase was influenced by a 12%/18% drop in zinc/lead LME stock over the quarter.

Silver prices rallied along with gold prices averaging at $28.8/Oz, rising by 19.1%/23.6% YoY/QoQ. Hindustan Zinc’s margins benefited from a favorable commodity price environment as well as efficient operations rendering cost of production lower. Zinc CoP (ex-royalty) of $1,107/tonne fell 7.3% YoY due to soft coal and input commodity prices, better coal linkages, and improved grades; zinc CoP grew by 5% QoQ in line with volume and grades.

For the full year FY25, the management maintains its CoP guidance between $1,050-1,100/tonne. We retain our estimates and value Hindustan Zinc at 7.5 times FY26E Ebitda (seven times FY26E Ebitda earlier) to arrive at a revised target price of Rs 348/share (Rs 306/share earlier), implying a downside of 47% from current market price. Maintain Sell.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.