Hindustan Zinc is a fully integrated zinc producer, with one of the best mining assets in the world. Its current mining capacity is 7,50,000 TPA ofMIC (metal in content), which it plans to ramp up gradually to 1 MTPA. Its smelter operations are situated at Chanderiya, Debrai and Visakhapamam. HZL has lead-zinc mines at Rajpura, Dariba, Rampura ete. Sterlite Industries has a 64.92 per cent stake in Hindustan Zinc, while the Government of India owns 29.54 per cent. Its captive mines and thermal power plants give the company a significant cost advantage, making it one of the lowest cost producers of zinc in the world.
For Q2FY10 the company's sales remained flat and were pegged at Rs 1,818 crore as against Rs 1,790 crore posted in Q2FY09. However, there was improvement in its EBIDTA margins which increased by 430 bps due to higher rupee realisations on metals. The profit of the company for the same period declined by 2.6 per cent and was Rs 935 crore. The current market price discounts HZI..:s last 12-month earnings by 19 times and that seems fairly valued. Nevertheless, what makes the scrip attractive is its cash and cash equivalent of Rs 10,200 crore at the end of September 2009 which works out to Rs 240 per share. Therefore, we advise you to buy at every dip with a one-year time horizon ..
For Q2FY10 the company's sales remained flat and were pegged at Rs 1,818 crore as against Rs 1,790 crore posted in Q2FY09. However, there was improvement in its EBIDTA margins which increased by 430 bps due to higher rupee realisations on metals. The profit of the company for the same period declined by 2.6 per cent and was Rs 935 crore. The current market price discounts HZI..:s last 12-month earnings by 19 times and that seems fairly valued. Nevertheless, what makes the scrip attractive is its cash and cash equivalent of Rs 10,200 crore at the end of September 2009 which works out to Rs 240 per share. Therefore, we advise you to buy at every dip with a one-year time horizon ..
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