So we will be looking into Hindustan Zinc which is the 2nd largest integrated Zinc producer globally and the 3rd largest silver producer in the world. It is also the subsidiary of Vedanta Limited, which has a 63.4 percent stake in the company, and the Government of India holds a stake of 27.9 percent.
Stock Performance
With a market cap of Rs 1.8 lakh crore, Hindustan Zinc Ltd‘s shares were trading at Rs 445.25 per share, marking a slight increase compared to its last closing price of Rs 442.15 per share. The stock is trading at a discount of 45 percent from its 52-week high of Rs 807.
Market Leader
Hindustan Zinc, India’s largest & only integrated producer of zinc, lead, and silver, commands more than a 75 percent market share in India’s primary zinc market. The company has the world’s biggest underground zinc mining operations at Rampura Agucha and the second-largest silver production at Sindesar Khurd.
WIth over 25 years of mine life, it has the second-largest zinc reserves and resources (R&R) base in the world and operates the world’s largest single-site zinc-lead smelting facilities at Chanderiya. Further, it is Asia’s first low carbon green zinc producer.
Dividends
Hindustan Zinc has been paying dividends to its shareholders continuously since 2003, beginning with a dividend of just Rs 0.8 per share.
The company’s latest dividend payment was in August 2024 for Rs 19 per equity share. It also offers a strong dividend yield of 6.5 percent. Looking at the return ratios, the company holds a solid ROE of 55.2 percent and ROCE of 46.2 percent.
Financial Performance
According to the latest quarterly results, the company reported a 17 percent growth in revenue from Rs 7,310 crore in Q3 FY24 to Rs 8,556 crore. This was accompanied by a 30 percent increase in net profits from Rs 2,038 crore to Rs 2,647 crore during the same period.
Industry Outlook
India’s zinc consumption is likely to exceed 2 million tonnes in the coming decade, an increase from 1.1 million tonnes currently, according to the International Zinc Association (IZA). Zinc demand across the globe is going to grow 43 percent in solar applications, while wind power usage is going to double by 2030, and energy storage solutions will grow seven times in the next five years.
India’s economic growth and expansion of its infrastructure pose excellent prospects for zinc consumption, with much greater potential coming from sources like avoiding corrosion expenditures that consume about 5 percent of GDP. Furthermore, the auto industry is likely to experience increased galvanized steel demand by 2030, aligned with global trends fueled by a growing middle class.
Written by Shwetha Sairam
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