Moneycontrol PRO
Check Credit Score
Check Credit Score
HomeNewsBusinessStocks

Accumulate Hindustan Zinc; target of Rs 200: Prabhudas Lilladher

Prabhudas Lilladher recommended accumulate rating on Hindustan Zinc with a target price of Rs 200 in its research report dated July 22, 2020.

July 22, 2020 / 03:14 PM IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Prabhudas Lilladher's research report on Hindustan Zinc

Hindustan Zinc (HZ) reported earnings in line with ours/consensus estimates. HZ missed its guidance on volumes and ore grade over past couple of years due to delay in commissioning of shafts and weaker than assessed ore grade. As the new shafts at both Rampura Agucha (RA) and Sindesar Khurd (SK) mines commenced hauling of ore, we expect significant improvement in quality of operations with better visibility on production and lower costs. In last five years since FY15, ore grade has fallen by ~30% to 7.5% due to fall in grade and share of RA mines. However, we do not expect negative surprise on grade front with likely range of 7.0-7.5% on the back of stabilisation of RA mines’ output. Zinc prices registered strong recovery in last couple of month with ~9% rise to US$2,170/t on the back of revival in Chinese demand and production cuts.


Outlook

We factor in Zinc at US$2,050/US$2085 in FY21e/FY22e as we expect ease in prices because of sharp run-up and cooling off in China’s pent-up demand. In the backdrop of better outlook and attractive valuations, we reiterate Accumulate rating with TP of Rs200, EV/EBITDA of 5.0x FY22e.



For all recommendations report, click here


Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Broker Research
first published: Jul 22, 2020 03:14 pm

Discover the latest business news, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!

Advisory Alert: It has come to our attention that certain individuals are representing themselves as affiliates of Moneycontrol and soliciting funds on the false promise of assured returns on their investments. We wish to reiterate that Moneycontrol does not solicit funds from investors and neither does it promise any assured returns. In case you are approached by anyone making such claims, please write to us at grievanceofficer@nw18.com or call on 02268882347