Vedanta Group-backed large-cap metal stock is a piping hot bet to add to the portfolio in the Diwali 2024 season. Brokerage Anand Rathi has recommended BUY for a target price of Rs 750, which hints at a nearly 48% upside. HZL has recently announced its Q2 results and is currently trading over Rs 500. The stock will be focused on in the coming days.
Hindustan Zinc Share Price:
HZL's share price is at Rs 507.50 apiece with a market cap of Rs 2,14,434.94 crore on BSE. It has corrected significantly from its 52-week high of Rs 807.00 apiece, while its 52-week low is at Rs 285.00 apiece.
At a PE ratio of 26.23%, the stock has given a return on equity of 53.67%, which is very strong. YTD, the stock is up by 57% on BSE.
Anand Rathi On HINDUSTAN Zinc:
According to Anand Rathi, for many months, HINDZINC has been trading in a downtrend after making a peak around the 780 mark. The stock then found support at the placement if it's 200 DEMA near the 470 level and has been consolidating there for many weeks.
The brokerage's note added, "We are witnessing multiple supports near the 470 mark and right now the stock is on the verge of a fresh breakout which would resume the uptrend. Investors / Traders can accumulate the stock with a time frame of around 1 year."
That being said, Anand Rathi has set two targets on HZL. Target 1 is at Rs 680, and Target 2 is at Rs 750. While the stop loss is at Rs 380. The entry-level on the stock is Rs 520-480.
Hindustan Zinc Split-Up?
As per the latest updates, Hindustan Zinc's CEO Arun Misra has reportedly revealed that the company is mulling the possibility of splitting the business into two units. The discussion is undergoing reportedly with the government. In an interview with Reuters, Misra told, "Hindustan Zinc believes in value creation through demerger and will continue pursuing this, disinvestment or no disinvestment, both ways."
Hindustan Zinc Q2 Results:
In Q2FY25, the company posted total revenue of 8,252 Crore, up 22% y-o-y on account of better metal & silver volumes and zinc & silver prices, further supported by a strong dollar and marginally offset by lower lead prices. It is up 2% q-o-q on account of better lead & silver volumes, partly offset by lower zinc volume and metal prices.
Its net profit before exceptional items for the quarter stood at INR 2,389 Crore, up 38% y-o-y and 2% q-o-q in line with the EBITDA. Net profit before exceptional items for the half year stood at INR 4,734 Crore, up 28% y-o-y in line with the EBITDA.
Also, HZL recorded its highest ever second quarter mined metal production at 256 kt, up 2% y-o-y on account of higher ore production at Zawar Mine, which was partly offset by lower mined metal grade at SK Mine, and down 2% qoq due to lower overall mined metal grades. H1 FY25 mined metal production stood at an all-time best figure of 519 kt, up 2% y-o-y with higher ore treatment and improved overall mined metal grades.
About Hindustan Zinc:
Hindustan Zinc, a Vedanta Group company, is the world's second-largest integrated zinc producer and the third-largest silver producer. The company supplies to more than 40 countries and holds a market share of about 75% of the primary zinc market in India.
Hindustan Zinc has a strong record of bonus issue, stock split, and dividends. As per Trendlyne data, since June 2001, the company delivered up to 43 dividends. In the last 12 months, the company paid up to Rs 35 dividend per share. It has a dividend yield of 6.91% on CMP.
The company only one stock split of 1:5 ratio and 1:1 bonus in March 2011.
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