Hindustan Zinc - Q1FY22 First Cut - ICICI Direct

(CMP- Rs. 327, Market Cap- Rs. 138168 crore)

Hindustan Zinc (HZL) reported steady operational performance for Q1FY22, wherein topline and EBITDA came in line with our estimates. However, on the back of exceptional expense, reported PAT came in lower than our estimate.

Q1FY22 Earnings Summary

For the quarter, zinc sales volumes came in at ~187000 tonnes (up 15% YoY, down 6% QoQ, broadly in line with our estimate of 190000 tonnes), lead sales volume came in at ~49000 tonnes (up 9% YoY, down 21% QoQ, in line with our estimate of 50000 tonnes), while silver sales volume came in at ~160000 kg (up 10% YoY, down 21% QoQ, lower than our estimate of 170000 kg)

Total operating income for the quarter stood at Rs. 6531 crore (up 64% YoY, down 6% QoQ), broadly in line with our estimate of Rs. 6570 crore

EBITDA came in at Rs. 3558 crore (up 126% YoY, down 8% QoQ), broadly in line with our estimate of Rs. 3568 crore. EBITDA margin came in at 54.5%, in line with our estimate of 54.3% (EBITDA margin of 55.8% in Q4FY21, 39.5% in Q1FY21)

In US$ terms, Zinc cost of production before royalty (CoP) during Q1FY22 stood at US$ 1070/tonne, up 5% YoY and 13% QoQ. In rupee terms the Zinc CoP (before royalty) during Q1FY22 stood at Rs. 78952/tonne (up 3% YoY and 14% QoQ).The increase in CoP is primarily due to surge in input commodity prices

During the quarter, HZL reported exceptional expense to the tune of Rs. 134 crore. Exceptional expense of Rs. 134 crore represents amount charged in respect of settlement of entry tax dispute under Amnesty scheme launched by the Government of Rajasthan. The ensuing net profit for Q1FY22 stood at Rs. 1983 crore (up 46% YoY, down 20% QoQ)

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

Shares of HINDUSTAN ZINC LTD. was last trading in BSE at Rs. 327 as compared to the previous close of Rs. 333. The total number of shares traded during the day was 176952 in over 5624 trades.

The stock hit an intraday high of Rs. 341.1 and intraday low of 319.75. The net turnover during the day was Rs. 59018546.

Source : Equity Bulls

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