3 HINDZINC share price target reports by brokerages below. See what is analyst's view on HINDZINC share price forecast, rating, estimates, valuation and prediction behind the target. You may use these research report forecasts for long-term to medium term for your investment or trades in 2020.
Hindustan Zinc (HZ) reported earnings in line with ours/consensus estimates. As the commissioning of shafts at Rampura Agucha (RA and Sindesar Khurd (SK) mines nearing the completion, we expect material improvement in production with better visibility. Continuous depletion in ore grade has been key concern over last 3-4 years. However, it has broadly bottomed out in the current range of 7.5%-7.6%. Zinc prices made strong recovery in last one month with 5% rise on the back of revival in Chinese demand, disruption in supplies and production cuts. We see prices to average at current levels of USD2000/t for FY21e/FY22e due to supplies issues and stable demand. In the backdrop of better outlook (both internal and market) and attractive valuations, we upgrade the stock to Accumulate with TP of Rs195, EV/EBITDA of 5x FY22e.
Going forward, we expect domestic zinc demand to pick up on the back of incremental demand from key user industries, especially railways. Indian Railways is setting targets to lay zinc-coated rails and has fitted stations with galvanised roofs to replace asbestos sheets. This augurs well for domestic zinc demand. Additionally, the recent uptick in zinc and lead prices on the LME augurs well. This will aid EBITDA margins to inch upwards from Q3FY20 levels. We value the stock at 6x FY21E EV/EBITDA and arrive at a target price of Rs 245. We upgrade the stock to BUY recommendation.
Zinc prices have recovered over the past two months (+6%), led by lower LME inventories. However, (a) weakening global demand concerns along with (b) anticipated higher supply should keep LME inventories under check. We estimate FY20 zinc LME to average near current levels (avg. of USD2,490).We expect mine production to recover (+10% growth in FY21) and CoP to decline due to shafts’ commission at RA and SKM. However, with zinc LME at USD2,500/t for FY21, the stock trades at 6x FY21E EV/EBITDA. We remainNeutral with TP of INR225/share based on 6.5x FY21E EV/EBITDA.
Hindustan Zinc (HZ) reported earnings in line with ours/consensus estimates. Earnings visibility continued to remain weak due to deteriorating ore grade and resultant higher cost of production (CoP). Zinc prices moved up by 5% in last one month due to production restrictions in China and improvement in sentiments related to USA-China Trade war. However, we do not see prices to sustain for long due to weaker demand. We maintain HOLD with TP of Rs235, EV/EBITDA of 6x FY21e.
In line with the company’s guidance, we also downward revise our FY20 volume guidance. For FY20E, we downward revise our zinc and lead sales volume by ~3% and ~7%, respectively, while for FY21E we downward revise our zinc and lead sales volume by ~5% and ~6%, respectively. The recent uptick in zinc and lead prices on the LME augurs well for HZL. We value the stock at 6x FY21E EV/EBITDA and arrive at a target price of Rs 235, maintaining HOLD recommendation on the stock.
Hindustan Zinc (HZ) reported EBITDA below our expectation due to lower than expected Zinc/Silver volumes. Earnings visibility continued to remain weak due to volatile ore grade. Ore grade further slipped by 13bps QoQ/37bps YoY to 7.2% despite low base. Zinc prices moved up by 10% in last one month due to production cuts and improvement in sentiments related to USA-China Trade war. However, we don’t see prices to sustain above USD2,550/t due to weaker demand and pick-up in supplies. We maintain HOLD with 4% increase in TP to Rs235 (to factor in lower capex), EV/EBITDA of 6x FY21e.
Valuation & Outlook: Currently HZL is under capacity expansion phase wherein its smelter debottlenecking to 1.2 million tonnes per annum (MTPA) is in progress, of which expansion to 1.13 MTPA will be completed in Q2FY20. This provides healthy revenue visibility in the longer run horizon. Going forward, during FY19-21E, we expect total operating income, EBITDA and PAT to grow at a CAGR of 5.6%, 8.6% and 7%, respectively. We value the stock on 6.0x FY21E EV/EBITDA and arrive at a target price of | 250. We maintain our HOLD rating on the stock.
Hindustan Zinc (HZ) reported EBITDA below our expectation by 3% (in line with consensus) due to lower than expected Lead/Silver volumes and higher power cost. Earnings visibility continued to worsen due to volatile ore grade. Ore grade slipped 0.3% QoQ to 7.5% despite low base. Deteriorating ore grade and peaked-out supply deficit would keep stock under pressure. We cut our earnings estimates by 11%/11% for FY20E/FY21E to factor in lower ore grade. We maintain HOLD with TP of Rs225 (earlier Rs240), EV/EBITDA of 6x FY21e.
Hindustan Zinc reported a healthy Q4FY19 performance. Going forward, during FY19-21E, we expect total operating income, EBITDA and PAT to grow at a CAGR of 7%, 11% and 10%, respectively. We value the stock on 6.5x FY21E EV/EBITDA and arrive at a target price of Rs 275, maintaining our HOLD rating on the stock.
Going ahead, conservative wholesale lending, retail product innovation and need for further provisioning (despite prudential provisions) would continue to weigh upon operating performance of the company. Factoring in adequate conservatism on growth (17-18% YoY), NIM+Fees (6.4- 6.9%), asset quality (NPA uptick to 6.3% from current 5.9%) and provisions (~185bps+ credit costs) translating into 2.3-2.4% RoAs and 17.0-17.6% RoEs over FY20-21E. Market headwinds refuse to abate calling for caution on developer financing (Rs 8bn Supertech primarily; refer Supertech Visit Update), beleaguered ILFS exposure (Rs18bn) and allied lumpy wholesale portfolios. Reiterate ACCUMULATE, TP of Rs177 based on 1.8x Mar-21 lending ABV, Sub Rs29.
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
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