Edelweiss is bullish on Hindustan Zinc has recommended buy rating on the stock with a target price of Rs 337 in its research report dated April 20, 2017.
Edelweiss' report on Hindustan Zinc
EBITDA exceeded consensus estimates owing to better than expected zinc (Zn) and lead sales volumes. Mined metal (MM) production surged 66% YoY (13% QoQ) to touch the highest-ever level of 312kt. Earnings were also buoyed by robust Zn (up 65%) and lead (up 30% YoY) prices.
We are upbeat on HZL as the stock offers twin benefits of EPS growth (11% CAGR through to FY19E) and stable dividend yield of 4-5% for both FY18E and FY19E. The stock has consistently delivered better EBITDA margins and RoEs versus global peers in past 8 years. We maintain ‘BUY/SO’ with a revised target price of INR 337 (INR 335 earlier), implying exit P/E of 13.8x FY19E which is in-line with global peers’ average.
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