Not Tata Steel Or JSPL, But Vedanta-Led Metal Stock Is Recommended To Buy; JM Financial

Brokerage JM Financial has recommended buy on one large-cap metal stock trading below Rs 700. This is neither JSPL or Tata Steel but instead Vedanta-led Hindustan Zinc. The buy recommendation comes after the company reported earnings operationally in-line with price outlook being positive. However, the 12-month target price indicates a drop in HZL as the stock is overvalued.

On BSE, Hindustan Zinc share price is at Rs 617.65 apiece, down by 5.3% with market cap of Rs 2,60,976.83 crore. The stock witnessed selling pressure due to bearish market.

In Q1FY25, HZL's PAT jumped by 19% YoY to Rs 2,345 crore, while it registered the highest-ever first quarter mined and refined metal production. PAT and operating profit (EBITDA) are the highest in 5 years. Total sales registered 12% YoY growth.

During the first quarter of FY25, Hindustan Zinc registered a net profit of 2,345 Crore, up 19% y-o-y and 15% sequentially due to higher EBITDA partly offset by higher tax expenses.

Meanwhile, its EBITDA for the quarter was at Rs 3,946 Crore, up 17% y-o-y and 8% q-o-q in line with the revenue from operations and the cost of production.

On the top-line front, HZL's revenue stood at Rs 8,130 Crore, up 12% y-o-y on account of better metal volume and metal & silver prices, further supported by a strong dollar and partly offset by lower silver volume. It is up 8% q-o-q on account of better metal & silver prices and favourable forex rates, partly offset by lower metal & silver volumes.