Hindustan Zinc, a Vedanta Group-backed metal giant, is an attractive bet ahead of the Diwali festival. Hindustan Zinc's share price has risen by over 60%, outperforming even its parent company Vedanta stock which gained by 18% on BSE. Hindustan Zinc's second quarterly earnings for FY25, was operationally in-line while its guidance stayed intact. The company is among the top dividend yield metal stock in both metal and large-cap baskets. Hindustan Zinc stock will be in focus ahead due to its latest demerger and investment update.
Hindustan Zinc Share Price:
Hindustan Zinc share price is currently at Rs 509.75 apiece, with a market cap of Rs 2,15,385.64 crore. The stock's 52-week high and low is Rs 807 apiece, and Rs 285 apiece respectively. YTD, the stock gained by over 60%. In a year, the upside is about 72.3%. In 5-years, the gains were about 141.36%.
Hindustan Zinc $2 Billion Update:
The company is likely planning to infuse about $2 billion or Rs 17,000 crore to double its production capacity to 2 million tonnes in the next few years, its CEO Arun Misra said. The company which had already engaged consultants to ramp up its capacity is looking for mining partners for the same, Misra told PTI. "We have a plan of doubling the production to 2 million tonnes," as per PTI report.
Hindustan Zinc Demerger:
As per the latest updates, Hindustan Zinc's CEO Arun Misra has reportedly revealed that the company is mulling the possibility of splitting the business into two units. The discussion is reportedly ongoing with the government. In an interview with Reuters, Misra said, "Hindustan Zinc believes in value creation through demerger and will continue pursuing this, disinvestment or no disinvestment, both ways."
BUY Hindustan Zinc Share:
As JM Financial said, the key takeaways from Hindustan Zinc are --- a) volume guidance for FY25 maintained at 1,075-1,100 tons refined metal / 750 -775 tons for silver b) CoP guidance maintained at USD1,050- 1,100, with a target towards the lower end c) 160 ktpa Roaster at Debari and Fertilizer Private Limited project to be commissioned by 4QFY25 and 2QFY25 respectively d) company partnered with Aesir Technologies for the supply of Nickel-Zinc batteries and Serentica Renewable for its renewable power requirements e) Net debt guidance for FY25 at INR20 bn.
JM's note said, " The company's net debt position as of 30th Sep'24 was INR57bn vs INR 3bn on 30th Jun'24. We remain positive on HZL given its presence in the lower end of the global cost curve facilitated by high-grade captive mines sufficient to meet requirements for decades, 100% captive power plants, sizeable scale, diversified revenue stream with increasing contribution from silver sales. Maintain BUY. "
The target price is set at Rs 540 apiece.
In Q2FY25, the company posted total revenue of 8,252 Crore, up 22% y-o-y on account of better metal & silver volumes and zinc & silver prices, further supported by a strong dollar and marginally offset by lower lead prices. It is up 2% q-o-q because of better lead & silver volumes, partly offset by lower zinc volume and metal prices.
Its net profit before exceptional items for the quarter stood at INR 2,389 Crore, up 38% y-o-y and 2% q-o-q in line with the EBITDA. Net profit before exceptional items for the half year stood at INR 4,734 Crore, up 28% y-o-y in line with the EBITDA.
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