Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Hindustan Zinc reported 2QFY12 EBITDA of Rs14.6bn (-8% qoq and +35% yoy), lower than our
forecast with lower volumes due to a maintenance shutdown and no concentrate sales.
Management guides for 450t of silver volumes in FY13 versus our est. of 238t. Maintain Buy.
Zinc-lead production at 200kt declines 4% qoq
Refined zinc production was 185kt (-4% qoq and +5% yoy) down sequentially due to a
maintenance shutdown. Saleable lead production (excluding captive consumption) was 15.6kt
(+6% qoq and +8% yoy). Saleable silver production was 41.8kt (+6% qoq and +18% yoy).
Saves lead concentrate for refinery
Refined zinc sales volume was 184kt (-4% qoq and +5% yoy). Lead sales were at 14.7kt (flat
qoq and +2% yoy) and silver volumes were at 41.4kt (flat qoq and +12% yoy). With the silver
refinery shortly to be commissioned, the company has not sold any lead and silver
concentrate during the quarter.
EBITDA of Rs14.6bn (-8% qoq and +35% yoy)
Net revenues were Rs26.4bn (-7% qoq and +22% yoy) impacted by lower refined metal and
concentrate sales. Mining royalty was up 11% qoq despite flattish production. EBITDA was
Rs14.6bn (-8% qoq and +35% yoy) versus our estimate of Rs16.9bn. Other income was
Rs3.8bn, up 9% qoq. Adj. net profit of Rs13.6bn (-9% qoq and +44% yoy).
Move to percentage of profits dividend policy will increase yield substantially
Management highlighted during the conference call that the company has moved to a
percentage of profits dividend policy from a progressive dividend policy. It has announced an
interim dividend of Rs1.5/share for 1HFY12. (22% of profits in 1H versus 9% in FY11). We
note that at current market prices, dividend yield for FY12 could be ~3% if dividend was
maintained at about 20%.
On track for 500 tonne silver capacity by end FY12
Company expects to ramp-up the SK mine to 2Mtpa by end FY12. The silver refinery which is
expected to be commissioned this quarter will also ramp-up to 85-90% capacity by 4QFY12.
This will pave the way for 500 tonnes of silver capacity by the same time. Management
guided for 450 tonnes of silver production for FY13F.
Plans to start mining in Kayar mine soon
The company plans to start mining in Kayar mine soon with groundbreaking already
complete. The mine has resources of 9Mt with average zinc grade of 10.6% and 1.7% lead
grade. It expects to produce 1Mtpa of ore from the mine.
Valuations attractive; Buy with of Rs182
Hindustan Zinc is currently trading at 7.1x/ 6.4x FY12/13F on a PE basis and 3.6x/2.5x
FY12/13F on an EV/EBITDA basis. We have a Buy rating on Hindustan Zinc with TP of
Rs182
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Hindustan Zinc reported 2QFY12 EBITDA of Rs14.6bn (-8% qoq and +35% yoy), lower than our
forecast with lower volumes due to a maintenance shutdown and no concentrate sales.
Management guides for 450t of silver volumes in FY13 versus our est. of 238t. Maintain Buy.
Zinc-lead production at 200kt declines 4% qoq
Refined zinc production was 185kt (-4% qoq and +5% yoy) down sequentially due to a
maintenance shutdown. Saleable lead production (excluding captive consumption) was 15.6kt
(+6% qoq and +8% yoy). Saleable silver production was 41.8kt (+6% qoq and +18% yoy).
Saves lead concentrate for refinery
Refined zinc sales volume was 184kt (-4% qoq and +5% yoy). Lead sales were at 14.7kt (flat
qoq and +2% yoy) and silver volumes were at 41.4kt (flat qoq and +12% yoy). With the silver
refinery shortly to be commissioned, the company has not sold any lead and silver
concentrate during the quarter.
EBITDA of Rs14.6bn (-8% qoq and +35% yoy)
Net revenues were Rs26.4bn (-7% qoq and +22% yoy) impacted by lower refined metal and
concentrate sales. Mining royalty was up 11% qoq despite flattish production. EBITDA was
Rs14.6bn (-8% qoq and +35% yoy) versus our estimate of Rs16.9bn. Other income was
Rs3.8bn, up 9% qoq. Adj. net profit of Rs13.6bn (-9% qoq and +44% yoy).
Move to percentage of profits dividend policy will increase yield substantially
Management highlighted during the conference call that the company has moved to a
percentage of profits dividend policy from a progressive dividend policy. It has announced an
interim dividend of Rs1.5/share for 1HFY12. (22% of profits in 1H versus 9% in FY11). We
note that at current market prices, dividend yield for FY12 could be ~3% if dividend was
maintained at about 20%.
On track for 500 tonne silver capacity by end FY12
Company expects to ramp-up the SK mine to 2Mtpa by end FY12. The silver refinery which is
expected to be commissioned this quarter will also ramp-up to 85-90% capacity by 4QFY12.
This will pave the way for 500 tonnes of silver capacity by the same time. Management
guided for 450 tonnes of silver production for FY13F.
Plans to start mining in Kayar mine soon
The company plans to start mining in Kayar mine soon with groundbreaking already
complete. The mine has resources of 9Mt with average zinc grade of 10.6% and 1.7% lead
grade. It expects to produce 1Mtpa of ore from the mine.
Valuations attractive; Buy with of Rs182
Hindustan Zinc is currently trading at 7.1x/ 6.4x FY12/13F on a PE basis and 3.6x/2.5x
FY12/13F on an EV/EBITDA basis. We have a Buy rating on Hindustan Zinc with TP of
Rs182
No comments:
Post a Comment