HZL reports steady production numbers; expansion plans on track ::Angel Broking,

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HZL reports steady production numbers; expansion plans on track
Hindustan Zinc (HZL) released production data for 2QFY2012. Mined metal production
increased by 2% yoy to 210,000 tonnes in 2QFY2012, reflecting improved production at
Rampura Agucha following the maintenance shutdown in 1QFY2012. Refined zinc
production increased by 5% yoy to 185,000 tonnes in 2QFY2012, primarily due to
improved operational performance at its hydro smelters. Refined lead production
increased by 6% yoy to 17,000 tonnes in 2QFY2012, primarily due to higher volumes
from the newly commissioned 100kt Dariba lead smelter. Silver production increased by
12% yoy to 1.6mn ounces in 2QFY2012. The company aims to commission the new silver
refinery during 3QFY2012, thus taking its silver capacity to 16mn ounces by the end of
FY2012. The company also informed that it was on track to achieve its targeted 2mn
tonnes p.a. capacity by the end of FY2012 at Sindesar Khurd mine. The company’s
production results are broadly in-line with our expectations. Further, HZL’s targets for
ramping up capacities are on schedule. Hence, we continue to maintain our Buy
recommendation on the stock with a target price of `156.