Hind Zinc share price: HZL stock falls ahead of Q1 results today; key expectations

Shares of Hindustan Zinc Ltd were trading marginally lower in Thursday's trade, ahead of the Vedanta group firm's June quarter results later today. HZL is anticipated to report more than doubling of year-on-year (YoY) June quarter net profit on 55-60 per cent rise in net sales. The numbers could be supported by higher zinc and silver prices despite a seasonal moderation in volumes. Lower CoP, aided by stronger sulphuric acid realizations and lower hedging losses, is expected to support profitability and keep margins near record levels, analysts said. 

HZL is promoted by Vedanta Ltd, which held 2,56,52,71,353 shares or 60.71 per cent stake in the company, as of June 30. At 1.08 pm, the stock was trading 0.63 per cent lower at Rs 527.75 on BSE. 

Antique Stock Broking expects HZL to report a revenue growth of 55 per cent YoY to Rs 11,973 crore, aided by firm zinc and silver prices, and rupee depreciation, partly subdued by hedging loss and YoY lower zinc volume. 
Consequently, Ebitda is expected to increase 99.9 per cent YoY to Rs 7,630 crore, and PAT is expected to grow 130 per cent to Rs 5,077 crore. 

Kotak Institutional Equities pegged HZL's Q1 net profit at Rs 5,060 crore. It expects net sales for HZL to surge 60.6 per cent YoY to Rs 12,480 crore.

"We estimate zinc/silver sales to increase by 6 per cent/2.8 per cent YoY, while lead sales decline 2.1 per cent YoY during the quarter, the domestic brokerage said. 

MOFSL said strong zinc prices are expected to drive earnings in 1Q, offsetting the muted silver prices. It said cost of production is likely to increase sequentially, driven by input cost inflation. The brokerage expects volumes for HZL to fall QoQ in the first quarter.
This brokerage sees net profit for Q1 rising 124 per cent YoY to Rs 5,015 crore on 63.4 per cent YoY rise in sales at Rs 12,699 crore.

"HZL’s Ebitda is likely to remain flat QoQ at Rs 7,650 crore on the back of higher average zinc price (up 9 per cent QoQ) and average blended silver prices (up 2 per cent QoQ due to import duty rising from 6 per cent to 15 per cent). This is likely to be offset by lower sales volume of zinc/lead/silver by 6.6 per cent/14.5 per cent/15.3 per cent QoQ. CoP ex-royalty for zinc is likely to increase 5 per cent QoQ to $950/t," Nuvama said.