Hindustan Zinc Reports Strong Q3 Results, Shares Jump 4%

In a recent development, Hindustan Zinc Ltd (Hind Zinc), a Vedanta group firm, witnessed a surge of 4% in its shares following the announcement of its third-quarter results. The Anil Agarwal-led company reported a significant 17% sequential rise in consolidated profit, reaching Rs 2,028 crore as compared to the previous quarter’s figure of Rs 1,729 crore. Although the firm experienced a 6% year-on-year decline in profit from the same quarter last year, the positive momentum in the Q3 earnings has created a favorable market response.

Earnings Breakdown

Hindustan Zinc
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Rise in Profit and Ebitda

Hindustan Zinc attributed the notable rise in profit to higher Earnings before Interest, Taxes, Depreciation, and Amortization (Ebitda) figures, which were partly offset by higher tax expenses. The Ebitda for the quarter stood at Rs 3,559 crore, reflecting a 14% quarter-on-quarter increase and a marginal 4% year-on-year decline. This decline is primarily in line with the revenue from operations, where cost improvements partially offset the impact of lower revenue.

Sales Performance

Hindustan Zinc reported an 8% sequential increase in sales during the quarter, amounting to Rs 7,310 crore. This rise was driven by favorable volumes and higher prices of zinc and silver, along with favorable exchange rates. However, on a year-on-year basis, sales were down by 7%. This decline can be attributed to significantly lower zinc prices in the market, lower zinc volumes, and the strategic hedging impact in the base period. Nevertheless, the company witnessed increased silver and lead volumes and prices, which helped mitigate the negative factors affecting sales.

Operational Excellence

CEO Arun Misra emphasized Hindustan Zinc’s commitment to operational excellence and highlighted the record nine-month production of mined metal and silver. The company capitalized on the opportunities presented by the elevated silver prices, demonstrating sustainable operational progress. Hindustan Zinc’s consistent focus on safe practices and industry-leading compounded annual production growth rate reinforces its position as an industry frontrunner.

 

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Financial Outlook and Cost Optimization

CFO Sandeep Modi emphasized Hindustan Zinc’s commitment to cost optimization, operational efficiencies, working capital management, digital improvements, and maximizing shareholder value. He commended the company’s relentless pursuit of consistent cost improvement, marking the fourth consecutive quarter of cost reduction and achieving the lowest cost in the last 10 quarters. Hindustan Zinc currently ranks in the first decile of the global zinc mining cost curve, securing its position as a cost leader globally. The company aims to achieve its designed cost in the near future, further strengthening its competitive advantage.

Market Response

Following the announcement of strong Q3 results, Hindustan Zinc’s stock soared by 3.8%, reaching a peak of Rs 323.65 on the Bombay Stock Exchange (BSE). This surge reflects investors’ positive sentiment toward the company’s remarkable financial performance and strategic focus on sustained growth and operational efficiency.

 

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Hindustan Zinc’s Q3 results highlight its ability to navigate market challenges and deliver robust financial performance. The company’s sequential rise in profit, consistent focus on operational excellence, and commitment to cost optimization have generated positive market response. Hindustan Zinc’s strategic initiatives and strong financial position position it well for future growth and sustained value creation for its stakeholders.

 

Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial advice. All investment decisions should be made with careful consideration of individual circumstances and thorough research into the specific company or market.

 

 

Source:businesstoday.in

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