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Hindustan Zinc
HZL’s net revenue grew by 28.0% yoy and 22.9% qoq to `3,197cr on account of higher
sales volume and realisation. Although lead volume fell by 11.3% yoy to 16kt, zinc volume
grew by 28.6% yoy to 194kt (up 32.6% and 9.0%, respectively, on a sequential basis).
Silver sales volume increased by 4.5% yoy and 50.1% qoq to 44,325kg, while zinc and
lead concentrate sales stood at 48,000dmt. Silver realisation increased by 89.4% yoy and
24.9% qoq to `49,197/kg. Thus, led by strong top-line growth, EBITDA grew by 30.6%
qoq and 27.1% yoy to `1,969cr, as margin expanded by 363bp qoq to 61.6%, though flat
on a yoy basis. Further, other income grew by 125% yoy and 46.1% qoq to `302cr and tax
rate came in lower at 16.9%, which resulted in net profit growing by 43.0% yoy and 37.4%
qoq to `1,771cr.
Currently, the stock is trading at 6.5x FY2012E and 5.2x FY2013E EV/EBITDA. HZL is
expected to benefit from the expansion of zinc-lead smelting capacity and increased silver
production. Further, HZL had a huge cash balance of `14,965cr as of March 31, 2011,
(`35 per share). However, we believe the current price discounts the above-mentioned
positives. We maintain our Neutral rating on the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Hindustan Zinc
HZL’s net revenue grew by 28.0% yoy and 22.9% qoq to `3,197cr on account of higher
sales volume and realisation. Although lead volume fell by 11.3% yoy to 16kt, zinc volume
grew by 28.6% yoy to 194kt (up 32.6% and 9.0%, respectively, on a sequential basis).
Silver sales volume increased by 4.5% yoy and 50.1% qoq to 44,325kg, while zinc and
lead concentrate sales stood at 48,000dmt. Silver realisation increased by 89.4% yoy and
24.9% qoq to `49,197/kg. Thus, led by strong top-line growth, EBITDA grew by 30.6%
qoq and 27.1% yoy to `1,969cr, as margin expanded by 363bp qoq to 61.6%, though flat
on a yoy basis. Further, other income grew by 125% yoy and 46.1% qoq to `302cr and tax
rate came in lower at 16.9%, which resulted in net profit growing by 43.0% yoy and 37.4%
qoq to `1,771cr.
Currently, the stock is trading at 6.5x FY2012E and 5.2x FY2013E EV/EBITDA. HZL is
expected to benefit from the expansion of zinc-lead smelting capacity and increased silver
production. Further, HZL had a huge cash balance of `14,965cr as of March 31, 2011,
(`35 per share). However, we believe the current price discounts the above-mentioned
positives. We maintain our Neutral rating on the stock.
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