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If we confess our sins, he is faithful and just and will forgive us our sins and purify us from all unrighteousness.

30 Oct 2015


Hi Friends,    Hindustan Zinc Ltd.  (HZL)  reported for 2 Q FY 2016, a 4% increase in revenue at  Rs.3908 Cr.  The out performance was led by better than expected volumes with refined zinc production at 211,000 MT, increasing 17% yoy.  The EBITDA  came in at Rs.2164 Cr., 16% increase of Rs.1874 Cr, led  by better than expected revenue growth.  The EBITDA increased 8% yoy and was up 30% sequentially.  The EBITDA margin improved 212bp yoy at 55.4% and was 463bp higher than expected.  Depreciation and finance expenses were moderate.  The Net Profit increased 5% yoy to Rs.2285 Cr. and was 15% ahead.  HZL’s Management has guided at a 16% increase in refined metal production volumes in FY 2016, led by the strong performance of 2QFY 2016.  The Management also indicated that the expansion projects remain  on track , which should help the company drive volumes.  Outlook and Valuation:  Expecting Zinc prices to continue its decline going forward led by global headwinds.  They have increased its volume estimates led by the strong out performance in 2QFY2016.  Expecting in view of the better than expected volumes and operating leverage potential.  The HZL is currently trading at 4xFY2017E EV/EBITDA.  The stock is a trading at very low P/E, investors can consider it for long term buy.

Financials:  Share Price  Rs.158/-,  Market Cap   68886.80,  PE   7.79,  Book Value  102.60,  Div.  220%,  Industry PE  8.08,  Face Value of share Rs.2/-,  Equity capital   845.06 Cr.,  Reserve   42508.01  Cr.,  Gross Sales for the period from 2011 – 2015 in Cr. :    10039.30,  11405.31,   12699.84,  13636.04 and 14788.39.   Net Profit in Cr for the period from 2011 to 2015 :   4900.49,  5526.04,  6899.48,  6904.62  and 8178.00,  Share holding  -  65%.

Good Luck.                                                           See You Later.       

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