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Q3FY12 – Net sales growth driven by strong volume from refined lead and
silver
• Net sales for the Q3FY12 stood at `27,868 mn, showing a moderate growth of 6.0% on Y-o-Y
and 5.7% sequentially. This was mainly on account of increase in production of refined lead,
silver and refined zinc, which grew by 102%, 38% and 6% respectively on Y-o-Y basis. The same
was offset fall in LME Zinc prices.
• EBITDA margin stood at 50.3% in Q3FY12, showing a decline of 699 bps on Y-o-Y and 432 bps on
Q-o-Q basis. This was mainly on account of higher lead concentrate consumption at Dariba.
The manufacturing expenses which constituted 37.4% of total cost of production rose by 18.6%
on Y-o-Y and the other expenses which accounts for 43.6% of the total cost, rose by 12% on
Y-o-Y basis.
• PAT for the Q3FY12 stood at `12,733 mn, showing a de- growth of 1.3% and 5.3% on Y-o-Y &
Q-o-Q basis.
Result Highlights
Strong volume growth on all segments of steel help steel unit exhibit a strong growth
Revenue for the zinc, Lead and Silver rose by 5.3% on Y-o-Y and 6.5% on Q-o-Q, fall in realisation
and increase in cost of production has resulted in EBIT de-growth of 10.5% & 4.3% on Y-o-Y and
Q-o-Q basis respectively. For the other division, which includes revenue from power was lower by
39.9% on Q-o-Q, however the same increased by 68.3% on Y-o-Y.
Valuation & Viewpoint
At current market price the stock is trading at 6.65x FY13E and 5.93x FY14E EV/EBIDTA of its
consensus estimates respectively. Given the low per capita consumption of zinc domestically at
0.41 kg vs the global average of 1.7 kg, along with expansion of its silver capacity coupled with
stabilization of its Lead unit commissioned during Q2FY12 to fuel growth in coming quarters. Also
with commodity prices (LME - zinc) showing signs of recovery, we expect HZL to benefit.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Q3FY12 – Net sales growth driven by strong volume from refined lead and
silver
• Net sales for the Q3FY12 stood at `27,868 mn, showing a moderate growth of 6.0% on Y-o-Y
and 5.7% sequentially. This was mainly on account of increase in production of refined lead,
silver and refined zinc, which grew by 102%, 38% and 6% respectively on Y-o-Y basis. The same
was offset fall in LME Zinc prices.
• EBITDA margin stood at 50.3% in Q3FY12, showing a decline of 699 bps on Y-o-Y and 432 bps on
Q-o-Q basis. This was mainly on account of higher lead concentrate consumption at Dariba.
The manufacturing expenses which constituted 37.4% of total cost of production rose by 18.6%
on Y-o-Y and the other expenses which accounts for 43.6% of the total cost, rose by 12% on
Y-o-Y basis.
• PAT for the Q3FY12 stood at `12,733 mn, showing a de- growth of 1.3% and 5.3% on Y-o-Y &
Q-o-Q basis.
Result Highlights
Strong volume growth on all segments of steel help steel unit exhibit a strong growth
Revenue for the zinc, Lead and Silver rose by 5.3% on Y-o-Y and 6.5% on Q-o-Q, fall in realisation
and increase in cost of production has resulted in EBIT de-growth of 10.5% & 4.3% on Y-o-Y and
Q-o-Q basis respectively. For the other division, which includes revenue from power was lower by
39.9% on Q-o-Q, however the same increased by 68.3% on Y-o-Y.
Valuation & Viewpoint
At current market price the stock is trading at 6.65x FY13E and 5.93x FY14E EV/EBIDTA of its
consensus estimates respectively. Given the low per capita consumption of zinc domestically at
0.41 kg vs the global average of 1.7 kg, along with expansion of its silver capacity coupled with
stabilization of its Lead unit commissioned during Q2FY12 to fuel growth in coming quarters. Also
with commodity prices (LME - zinc) showing signs of recovery, we expect HZL to benefit.
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