Hindustan Zinc - Q1FY21 First Cut - ICICI Securities

(CMP: Rs. 183, MCap: Rs. 77450 crore)

Hindustan Zinc reported a mixed set of numbers for Q1FY20, wherein topline and PAT came in higher than our estimate, while EBITDA and EBITDA margin came in lower than our estimate. Topline came in higher than our estimate on the back of better than expected lead and silver sales volume, while PAT came in higher than our estimate on the back of higher than expected other income.

Q1FY21 Earnings Summary

- For the quarter, zinc sales volumes came in at ~163000 tonnes (broadly in line with our estimate of 162500 tonnes), lead sales volume came in at ~45000 tonnes (higher than our estimate of 42500 tonnes) while silver sales volume came in at ~146000 kg (higher than our estimate of 120000 kg)

- Topline came in at Rs. 3989 crore (down 20.0% YoY, 9.2% QoQ), higher than our estimate of Rs. 3893 crore. Topline came in higher than our estimate on the back of better than expected lead and silver sales volume

- EBITDA came in at Rs. 1576 crore (down 36.4% YoY, 19.8% QoQ), lower than our estimate of Rs. 1692 crore. EBITDA margin came in at 39.5%, lower than our estimate of 43.4% (EBITDA margin of 49.7% in Q1FY20 and 44.7% in 44.7% in Q4FY20). Contribution to PM care fund and other start-up costs led to higher reported CoP during Q1FY20.

- Zinc cost of production (CoP), before royalty and adjusted for one-time costs (Covid-19 related donations and start up costs) was US$954 (Rs. 72004) per tonne for the quarter, lower by 11% YoY in US$ terms (lower by 3% YoY in rupee terms) and lower by 4% QoQ in US$ terms (Flat in rupee terms). Reported CoP was US$ 1019 (Rs. 76920) per tonne and included Rs. 101 crore (US$ 53 per tonne) for contribution towards PM CARE fund.

- Other income for the quarter stood at Rs. 684 crore (up 59.4% YoY and 45.5% QoQ) higher than our estimate of Rs. 445 crore. The ensuing PAT came in at Rs. 1359 crore (down 23.0% YoY, however up by 1.5% QoQ), higher than our estimate of Rs. 1245 crore.

We would be coming out with the detailed report post the conference call.

Shares of HINDUSTAN ZINC LTD. was last trading in BSE at Rs.182.95 as compared to the previous close of Rs. 187.8. The total number of shares traded during the day was 68488 in over 2490 trades.

The stock hit an intraday high of Rs. 190.4 and intraday low of 182.5. The net turnover during the day was Rs. 12645764.

Source : Equity Bulls

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