Hindustan Zinc - 3QFY2014 result - Angel Broking

Hindustan Zinc's net profit slightly below our expectations

"Hindustan Zinc's (HZL) 3QFY2014 net profit was slightly below our expectations. HZL's net revenue increased by 8.6% yoy to Rs. 3,410cr (in line with our estimate of Rs. 3,446cr) mainly due to increased sales volumes, partially offset by decline in prices. Average zinc, lead and silver prices declined by 2%, 4% and 36%, yoy, respectively, which was partially offset by 15% INR depreciation against the USD. Nevertheless, refined zinc production (integrated) volumes increased 17.0% yoy to 196kt due to higher production from Rampura Agucha and Zawar mines; refined silver production (integrated) volumes also grew 35.0% yoy to 72kt. Despite cost of zinc production rising by 16.0% yoy to Rs. 52,014, EBITDA increased by 22.1% yoy to Rs. 1,824cr due to higher volumes and lower mining and royalty expenses. However, other income decreased by 16.3% yoy to Rs. 424cr. Hence, net profit grew by 6.8% yoy to Rs. 1,723cr (slightly below our estimate of Rs. 1,795cr). The company has lowered its FY2014 zinc production guidance from 950,000 tonnes to 900,000 tonnes due to slower-than-expected ramp up in production from underground mine. We maintain our Buy rating on the stock while we keep our target price under review."

Hindustan Zinc 3QFY2014 Result Review (CMP: Rs. 130/ Target Price: Under Review/ Recommendation: Buy).

Source : Equity Bulls

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