Hindustan Zinc Q1 results preview: Profit may rise up to 15%, margins expansion likely

Hindustan Zinc (HZL) is scheduled to share its results for the quarter ended on June 30, 2024 on Friday and the brokerage firms are expecting a decent set of numbers from the metal and mining player in the first quarter of the current fiscal year. Brokerage firms believe that volumes of zinc, lead and silver and management commentary will be the key.
 

Analysts tracking the stock expect the HZL to report a net profit in the range of Rs 2,200-2,400 crore positing a higher-teens growth on a year-on-year (YoY) basis. Revenue is also expected to report double digit growth on a yearly basis, while quarter-on-quarter (QoQ) growth may remain subdued. Ebitda margins are likely to expand 250-300 basis points (bps) YoY.
 

Kotak Institutional Equities expects Hindustan Zinc to report a revenue of Rs 8,120.9 crore in Q1FY25, up 11.5 per cent YoY and 7.6 per cent QoQ. Ebitda is seen at Rs 3,976 crore, jumping 19 per cent YoY with Ebitda margins expanding 300 bps YoY to 49 per cent. Adjusted PAT is seen at Rs 2,2734. crore, up 15.8 per cent YoY and 11.6 per cent QoQ.
 

"We expect zinc and lead sales to increase 1.4 per cent and 2 per cent YoY and silver sales to decline by 6.7 per cent YoY. We estimate Ebitda to increase 9 per cent QoQ primarily led by higher zinc/silver prices during the quarter, partially offset by lower silver volumes," said Kotak Institutional Equities, which has sell rating on the with a fair value of Rs 310.
 

Shares of Hindustan Zinc tumbled about 2.4 per cent to Rs 632.05 during the trading session on Friday, with its total market capitalization falling below Rs 2.7 lakh crore mark. The stock had settled at Rs 647.55 in the previous trading session on Thursday. It has surged nearly 125 per cent from its 52-week lows at Rs 285 hit in March 2024.
 

Phillip Capital sees HZL's revenue at Rs 8,038.8 crore in the June 2024 quarter, rising 10 per cent YoY and 6 per cent QoQ. Ebitda is seen at Rs 3,923.4 crore, increasing 17 per cent YoY, with Ebitda margins coming in at 48.8 per cent, increasing 280 bps YoY and 50 bps sequentially. PAT is pencilled at Rs 2,230 crore, up 14 per cent YoY and 9 per cent on a quarterly basis.
 

"Zinc volumes to be lower by 5 per cent and Zinc LME to be higher by 16 per cent QoQ. Cost of productions to be higher while silver discounts widened," Phillip Capital said.
 

JM Financial pencils HZL's revenue at Rs 7,800 crore, up 8.4 per cent YoY and 4.6 per cent QoQ. Ebitda is seen coming in at Rs 3,900 crore, increasing 16.6 per cent YoY and 7 per cent QoQ. PAT may come in at Rs 2,100 crore, surging 8.1 per cent YoY and 4.2 per cent QoQ for the first quarter of the current fiscal.
 

"We estimate blended realization to increase by Rs 23,000 per ton led by higher zinc and silver prices. We estimate Ebitda to increase to Rs 3,900 crore up 7 per cent QoQ,  mainly led by higher realizations," said JM Financial, which currently has a 'buy' rating on the stock.
 

 

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