Hindustan Zinc’s Q1FY17 standalone net profit declines 14% yoy to Rs. 7054.31 crore: Misses Estimates

The company’s standalone revenue stood at Rs. 2,530.61 crore, down 29.62% yoy but up 0% qoq.

July 20, 2016 8:39 IST | India Infoline News Service
Hindustan Zinc Ltd
Hindustan Zinc reported standalone net profit of Rs. 7,054.31 crore For the quarter ended June 30, 2017, declining by 13.74% yoy. Its standalone revenue for the quarter stood at Rs. 13,624.66 crore, registering decline of 7.87% yoy.

Hindustan Zinc Ltd's core operating profit stood at Rs. 6,433.67 crore, recording decline of 13.29% yoy. Operating margin for the current period at 46.82% contracted by 335 bps yoy.

Hindustan Zinc Q1FY17: Earnings Disappoint: 

Hindustan Zinc's revenue went down 30% during the quarter to Rs 2,501.47 crore, compared to Rs 3595 crore a year ago, led mainly by lower zinc volumes and lower prices at the benchmark London Metal Exchange (LME). HZL reported a 47% decline in net profit to Rs 1037 crore during the first quarter of FY17, led by higher depreciation, and taxes and lower investment income. This was, however, partly offset by higher rupee depreciation and higher silver prices."A smaller investment corpus on account of dividend pay-out in the beginning of the quarter led to lower investment income, which along with higher tax rate and higher depreciation resulted in net profit of Rs 1,037 crore, lower by 47% y-o-y," a HZL statement issued late on Thursday evening said.

Management comments:

Agnivesh Agarwal, chairman HZL said: "In line with strong zinc fundamentals and our expectations, zinc prices surged 14% in Q1 FY 2017 as compared to the previous quarter, making it the best performing base metal. We also witnessed a rally in silver prices, which along with increasing volumes is accentuating its contribution in our profits, having reached almost 20% at present.

Result Highlights: (Rs. in crore)

Reported Results IIFL Estimates Variance (%)
Standalone Revenue 2530.61 2853.7 [11.32]
Standalone Net Profit 1036.86 1309.9 [20.84]

Standalone EPS for the quarter stood at Rs. 2.45.

Stock Commentary:

Hindustan Zinc Ltd is currently trading at Rs. 194.6, up by 0.55 points or 0.28% from its previous closing of Rs. 194.05 on the BSE.

The scrip opened at Rs. 187.95 and has touched a high and low of Rs. 195.9 and Rs. 187.95 respectively. So far 2038454(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 81991.95 crore.

The BSE group 'A' stock of face value Rs. 2 has touched a 52 week high of Rs. 203.3 on 13-Jul-2016 and a 52 week low of Rs. 117.2 on 25-Aug-2015. Last one week high and low of the scrip stood at Rs. 197.9 and Rs. 185.4 respectively.

The promoters holding in the company stood at 64.92 % while Institutions and Non-Institutions held 32.41 % and 2.67 % respectively.

The stock is currently trading below its 50 DMA.

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