Hindustan Zinc drops amid volatility after Q3 earnings

Hindustan Zinc lost 1.19% to Rs 128.90 at 15:22 IST on BSE after net profit rose 7% to Rs 1723 crore on 9% growth in net sales to Rs 3410 crore in Q3 December 2013 over Q3 December 2012.

The Q3 result was announced during trading hours today, 17 January 2014.

Meanwhile, the S&P BSE Sensex was down 205.03 points or 0.96% at 21,060.15.

On BSE, so far 2.87 lakh shares were traded in the counter as against average daily volume of 1.50 lakh shares in the past one quarter.

The stock was volatile. The stock lost as much as 1.64% at the day's low of Rs 128.30 so far during the day. The stock rose as much as 1.34% at the day's high of Rs 132.20 so far during the day. The stock had hit a 52-week high of Rs 140.45 on 10 December 2013. The stock had hit a 52-week low of Rs 94 on 2 August 2013.

The stock had underperformed the market over the past one month till 16 January 2014, declining 0.15% compared with the Sensex's 2.93% rise. The scrip had also underperformed the market in past one quarter, sliding 1.58% as against Sensex's 3.49% gain.

The large-cap company has equity capital of Rs 845.06 crore. Face value per share is Rs 2.

Hindustan Zinc said its top line growth during the quarter was driven by higher zinc sales volume and rupee depreciation, partially offset by lower silver and acid prices.

Hindustan Zinc's earnings before interest, taxation, depreciation and amortization (EBITDA) rose 21% to Rs 1828 crore in Q3 December 2013 over Q3 December 2012. The increase in EBITDA was driven by higher integrated sales volume and rupee depreciation, partially offset by lower silver price and higher costs in rupee terms.

With regard to its expansion projects, Hindustan Zinc said that the mine development is progressing well at all its underground projects. Kayad mine has become operational during the quarter. The company's project capex will be in line with its guidance of $250 million per year, Hindustan Zinc said in a statement.

As of 31 December 2013, the company had cash and cash equivalents of Rs 24095 crore, out of which Rs 19111 crore was invested in debt mutual funds, Rs 1972 crore in bonds and Rs 3000 crore were in fixed deposits with banks. The company added that it follows a conservative investment policy and invests in high quality debt instruments.

Commenting on the Q3 results, Mr. Agnivesh Agarwal, Chairman, Hindustan Zinc, said, "The emerging global demand-supply dynamics is leading to a consistent deficit scenario as anticipated. We remain focused on driving growth while maintaining our cost leadership".

Hindustan Zinc is one of the largest integrated producers of zinc-lead with a capacity of 1 million MT per annum and a leading producer of silver.

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