Feb 15, 2013, 02.46 PM | Source: Moneycontrol.com

Buy Hindustan Zinc; target of Rs 148: Firstcall Research

Firstcall Research is bullish on Hindustan Zinc and has recommended buy rating on the stock with a target of Rs 148 in its February 14, 2013 research report.

Firstcall Research is bullish on Hindustan Zinc and has recommended buy rating on the stock with a target of Rs 148 in its February 14, 2013 research report.

“Hindustan Zinc (HZL) was incorporated in January 1966. Hindustan Zinc is a Vedanta Group company in Zinc, Lead and Silver business. HZL is India’s leading integrated producer of zinc & lead and is among the world’s leading integrated producers. It has a metal production capacity of 10, 64,000 tonnes per annum(879,000 tonnes of zinc and 185,000 tonnes of lead). HZL has around 7,000 employees. The company is a subsidiary of the NYSE listed, Sterlite Industries (India) Limited (NYSE: SLT) and London listed FTSE 100 diversified metals and mining major, Vedanta Resources plc. The Company has four mines and four smelting operations: mines are situated at Rampura Agucha (largest zinc producing mine in the world), Sindesar Khurd, Rajpura Dariba and Zawar in the State of Rajasthan; while the smelters are located at Chanderiya, Debari and Dariba in the State of Rajasthan and Vizag in the State of Andhra Pradesh.”

“The company’s net profit jumps to Rs.16125.40 million against Rs.12736.00 million in the corresponding quarter ending of previous year, an increase of 26.61percent. Revenue for the quarter rose 14.04percent to Rs.31780.20 million from Rs.27868.10 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.3.82 a share during the quarter, registering 26.61percent increase over previous year period. Profit before interest, depreciation and tax is Rs.20002.80 millions as against Rs.17777.20 millions in the corresponding period of the previous year.”

“At the current market price of Rs.129.00, the stock P/E ratio is at 9.08 x FY13E and 8.16 x FY14E respectively.  Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.14.21 and Rs.15.80 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 9percent and 11percent over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 5.92 x for FY13E and 5.36 x for FY14E. Price to Book Value of the stock is expected to be at 1.66 x and 1.38 x respectively for FY13E and FY14E.  We recommend ‘buy’ in this particular scrip with a target price of Rs.148 for medium to long term investment,” says Firstcall Research report.

Non-Institutions holding more than 90% in Indian cos  

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