This Vedanta Group stock has zoomed 69% since April; m-cap tops Rs 2 trn

Shares of Hindustan Zinc hit a record high of Rs 493.85, as they rallied 8 per cent on the BSE in Friday’s intra-day trade amid heavy volumes on strong business outlook. Thus far in the month of May, the stock price of this Vedanta Group company has surged 16 per cent. Since April, it has zoomed 69 per cent.

A sharp surge in the stock price of Hindustan Zinc has seen the market capitalisation (m-cap) of the company cross Rs 2 trillion.

At 10:38 am; Hindustan Zinc was trading 7 per cent higher at Rs 488.70 with m-cap of Rs 2.07 trillion, the BSE data shows. In comparison, the S&P BSE Sensex was up 0.63 per cent at 72,822.

On May 7, the company’s board approved the interim dividend of Rs 10 per equity share i.e. 500 per cent on face value of Rs 2 per equity share for the financial year 2024-25 amounting to a payout of Rs 4,225 crore. The board fixed May 15, 2024 as the record date for the purpose of determining the entitlement of the equity shareholders for the said dividend.

As on March 31, 2024, Vendata held 64.92 per cent stake in Hindustan Zinc. The government of India held 29.54 per cent holding in the company through President of India, the shareholding pattern data shows.

Hindustan Zinc is Zinc-Lead and Silver business is world’s 2nd largest integrated Zinc producer and now the 3rd largest Silver producer. The company has a market share of around 75 per cent of the growing Zinc market in India with its headquarters at Zinc City, Udaipur along with Zinc-Lead mines and smelting complexes spread across the state of Rajasthan.

Both mined metal and refined metal production in the current financial year 2024-25 (FY25) is expected to be higher than last year, given the rampup of all major projects commissioned in the last year and better capacity utilization.  Mined metal is expected to be between 1,100-1,125 kt & refined metal production in the range of 1,075-1,100 kt.

FY25 saleable silver production is projected to be between 750 MT and 775 MT. Zinc cost of production in FY25 is expected to be in between US$ 1,050 and 1,100 per MT. Project capex for the year is expected to be in the range of US$ 270-325 million, Hindustan Zinc said on FY25 outlook.

Analysts at JM Financial Institutional Securities remain positive on Hindustan Zinc given its presence in the lower end of the global cost curve facilitated by high grade captive mines sufficient to meet requirements for decades, 100 per cent captive power plants, sizeable scale, diversified revenue stream with increasing contribution from silver sales. The stock however, trading above brokerage firm’s target price of Rs 385 per share.