Hindustan Zinc Limited is a mining company which primarily deals with zinc, silver, and lead. It is a subsidiary of Vedanta Resources Public Limited Company.
The market cap of Hindustan Zinc Limited, as of June 26, 2018, is a little over Rs.1,21,200 crore.
Company’s Wealth and Recent Performance
- For the fourth quarter of the fiscal year 2017-18, Hindustan Zinc reported its revenues to be at Rs.6,277 crore. This is a 6% increase over the December quarter. Subsequently, EBITDA for the March quarter was at Rs.3,660 crore - up by 12% over the previous quarter.
- For the year ended on March 31, 2018, the total revenues of the company were up by 28% over the previous fiscal year. The total income for the year was reported to be at Rs.24,272 crore and this price was driven mainly by higher metal volumes.
- The net profit for the year was also up by 12% to Rs.9,276 crore on account of higher revenue, EBITDA and lower depreciation costs.
- Considering the operational performance of the company over the year, the production of mined metal was up by 4% year-on-year to 947 kt. A more substantial rise was seen in the production of refined metal, with zinc, silver, and lead registering a growth of 18%, 23%, and 21% respectively over the last fiscal year.
- The company’s non-current liabilities for the FY 2017-18 stands at Rs.995 crore, while its total assets are valued at Rs.42,932 crore.
Hindustan Zinc Limited Stock Trends in 2018
- On January 2, 2018, the opening price of the Hindustan Zinc share was Rs.311.45. The stocks made marginal gains in the first half of the month, only to follow it with a sharp fall. The scrip lost more than 5% on account of weak performance in the third quarter. In the final week, the prices recovered slightly to end the month at Rs.310.25.
- The first week of February was a tumultuous one for the investors as the shares went down to be traded at levels above Rs.290. Interestingly enough, this fall was almost immediately followed by a sharp spike in the prices. This rise saw the Hind Zinc shares cross the Rs.330 mark and eventually reach their 52-week high at Rs.340.20. However, the scrip failed to sustain at that level and the closing price at the end of the month was Rs.326.45.
- Over the course of March, the share price of Hind Zinc went down by a little over 5%. An interim dividend of 300% was announced in the same month. In April, the prices rose once again to reach their previous levels at Rs.330. On April 30, 2018, the closing price of the scrip on the NSE was Rs.326.85.
- The month of May was a disappointing one for the investors. The share price of Hindustan Zinc Limited went down by more than 10% in a little over three weeks. The shares were trading at levels slightly above Rs.280 in the final week of May. The shares ended the month at Rs.296.35.
Hindustan Zinc Stock Limited Trends in 2016 and 2017
- At the start of 2016 January, the share price of Hind Zinc Limited was varying at levels around Rs.140 - Rs.150. By February, the price had ascended to levels above Rs.165. The share price didn’t vary a lot over the next couple of weeks and the price maintained its bearings at those levels. Towards the end of the month, the price spiked on the back of special dividend announcement. As a result, the closing price at the end of March 2016 was Rs.183.60.
- A special dividend of 1200% was announced in early April. After the sharp rise, the shares retreated back to their previous levels at Rs.170. Investors maintained their faith in Hindustan Zinc owing to the company’s decent performance in the fourth quarter and FY16. The prices did not change a lot over the course of May. It wasn’t until late June that the prices registered a rise again.
- In early July, the Hindustan Zinc share price was around Rs.180. By the end of the month, the scrip had crossed the Rs.200 mark on the back of positive developments in the company and a decent Q1 FY17 performance. Investors continued to benefit from the excellent performance of the company in the month of August as well. The shares changed hands at levels well above Rs.220 in the month. The closing price of the scrip on August 31, 2016, was Rs.227.
- The prices dipped slightly in early September but soon followed it with a steady rise. The shares continued to be traded at levels above Rs.230. In October, the Hind Zinc shares found a new heading when they breached past the psychological barrier of Rs.250 owing to a good performance in Q2 FY17. In early November, an interim dividend of 95% was announced and the shares were seen trading at levels above Rs.270. Post demonetisation, the shares lost a little over 13% but still managed to retain its bearings in the Rs.200 region. The final month of the year saw the Hind Zinc scrip stage a recovery, although it shed those gains in the last week. The closing price at the end of the year was Rs.249.60.
- In January 2017, the share price of Hindustan Zinc Limited gained more than 15%. This meteoric rise was driven by the anticipation of Q3 FY17 results. This led to the scrip enter the Rs.300 region for the first time in its history. Through most of February, the shares were traded at these levels with the closing price on February 28, 2017 being Rs.308.25.
- The first week of March saw the prices retreat back to its previous levels at Rs.290. Nonetheless, it was followed by an impressive rise which took the Hindustan Zinc share price back to the Rs.320 level. A special dividend of 1,375% was also announced in this period.
- Over the course of April and May, the Hindustan Zinc shares exhibited a bear run. The shares lost more than 20% in this period, with the price going down from Rs.291 in early April to Rs.238 in early June. However, the shares recovered splendidly in the second half of the year and recovered their previous losses. By the end of July, the shares had ascended back to their previous levels at Rs.280.
- Needless to mention, the long-term investors were in for a rocky ride. Prices didn’t vary a lot in August as the investors exercised caution. It wasn’t until September that the shares entered the Rs.300 region once again. An interim dividend of 100% was announced in early November. The prices dropped slightly towards the end of the month but recovered well in December. The closing price at the end of the year was Rs.308.85.
Should you invest in Hindustan Zinc Limited?
- Hindustan Zinc has reported excellent numbers in its performance report for the financial year 2017-18. Important metrics like EBITDA, sales, and net profit have improved remarkably on the back of higher metal prices. Furthermore, the production numbers of mined and refined metals were highest for the year and were well in line with the estimates provided at the beginning of the year.
- The company is also planning to expand its operations by boosting its mined metal capacity from 1.2 mtpa to 1.5 mtpa over the next few years. This includes increasing the production capacity of each of its mines gradually.
- Zinc is one of the most sought-after metals. In terms of demand, it is right there on the top with iron, aluminium, and copper. Its anti-corrosive properties make it an important metal for key sectors like automobiles, electronics, and infrastructure. It is also a key ingredient for brass - a commonly used alloy for various applications.
- The development and growth of India’s economy depend on its infrastructure. The demand for metals like zinc is quite likely to increase in the future. With supply quite limited now, owing to China’s crackdown on mining practices, Hindustan Zinc is placed strategically to meet this growing demand. The company’s overall mine life is more than 25 years according to the company, and its zinc-lead metal resources are estimated to be at 35.7 million tonnes.
- At the same time, regulatory moves on the mining industry to reduce the impact of pollution may play an important role in the performance of this stock. Before investing in the Hind Zinc shares, it is recommended that you do your own research and analysis.
Hindustan Zinc Limited is a mining company that specialises in the production and refinement of silver, lead, zinc, and cadmium. It is among the largest producers of zinc in the world and is a direct subsidiary of Vedanta Limited. It operates five mines in India, including the gigantic Rampura Agucha mine. Its other mines are located in Rajpura Dariba, Sindesar Khurd, Zawar, and Kayad. Hindustan Zinc aims to be a low-cost producer of zinc-lead and silver in the world. In addition to operating mines, Hindustan Zinc also operates smelters, including the Chanderiya Lead-Zinc Smelter.
History of the Company
The history of Hindustan Zinc Limited can be traced back to the year 1966, when the company was incorporated as a public sector undertaking from the erstwhile Metal Corporation of India. In 2001, the company was put up for sale as a part of the Government of India’s disinvestment program. As a result, in April 2002, Sterlite Opportunities and Ventures Limited (SOVL) made an offer for the acquisition of the shares of the company. Consequently, SOVL acquired 26% of shares from the government along with the management control. It also acquired another 20% of shares from the public and another 18.92% of shares from the government in August 2003, by exercising its ‘call option’ clause in the shareholder’s agreement. With this acquisition, SOVL’s total stake in the company stands at 64.92%. In April 2011, SOVL was merged with Sterlite Industries Limited and in 2013, it was merged with Sesa Goa Limited to form Sesa Sterlite Limited. Eventually, Sesa Sterlite was renamed to Vedanta Limited and Hindustan Zinc became the subsidiary of Vedanta Limited.
Management of the Company
Mr. Agnivesh Agarwal - Chairman
Mr. Agarwal has been a part of the Board of Directors since November 15, 2005. As a graduate in commerce from Sydhenam College, University of Mumbai, Mr. Agarwal has efficiently handled a wide variety of projects over his impressive tenure. His field of expertise also includes business restructuring and strategic planning. Prior to joining Hindustan Zinc, he served as a Whole-time Director of Madras Aluminium Company Limited and Non-Executive Director of Sterlite Energy Limited. He has played an important role in making Hindustan Zinc one of the most reputed producers of lead, silver, and zinc in the world.
Mr. Sunil Duggal - Chief Executive Officer & Whole-time Director
Mr. Duggal has been with the company since 2010, when he joined as the Executive Director. In just two years, he was appointed as the Chief Operating Officer and soon followed it with the appointment to the Deputy CEO post. He became the CEO and Whole-time Director on October 1, 2015. His illustrious career spans across 32 years, of which he has spent more than 18 years in various leadership positions. He has a degree in Electrical Engineering from Thaper Institute of Engineering & Technology, Patiala.
Mr. Navin Agarwal - Director
Mr. Agarwal joined the Board of Directors in April 2002. He has played an important role in the success of the company over the years. He has been actively involved with the Vedanta Group of Companies - he serves as the Chairman of Vedanta Limited and Cairn India Limited, in addition to serving as the Deputy Executive Chairman of Vedanta Resources Plc.
Hindustan Zinc Limited Listings in NSE, BSE and Listings
The shares of Hindustan Zinc Limited are available for purchase on the National Stock Exchange of India Limited and the Stock Exchange, Mumbai. The codes for the same are as follows:
- NSE Code - HINDZINC
- BSE Code - 500188
- ISIN - INE267A01025
- Sector - Metals & Mining - Non Ferrous
As for the stock market indices, the company forms a part of the following indices:
- NIFTY 100
- NIFTY 200
- NIFTY Dividend Opportunities 50
- S&P BSE 200
- S&P BSE AllCap
- S&P BSE 150 MidCap Index
- Nifty Metal
- Nifty Next 50
- S&P BSE Metal
Hindustan Zinc Limited
Udaipur - 313-004
Contact number: +91-294-66040000-02
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