Hindustan Zinc Q3 PAT seen up 0.5% at Rs 1295.9 cr

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Hindustan Zinc Q3 PAT seen up 0.5% at Rs 1295.9 cr

Hindustan Zinc (HZ), an integrated mining and resources producer of zinc, lead, silver and cadmium, is likely to report a profit after tax of Rs 1,295.9 crore in the third quarter of FY12, a growth of just 0.5% as compared to Rs 1,289.6 crore in a year ago period.

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Hindustan Zinc (HZ), an integrated mining and resources producer of zinc, lead, silver and cadmium, is likely to report a profit after tax of Rs 1,295.9 crore in the third quarter of FY12, a growth of just 0.5% as compared to Rs 1,289.6 crore in a year ago period.

Revenues are seen going up 2% to Rs 2,663 crore from Rs 2,601.5 crore during the same period.

EBITDA is expected to go down 7% to Rs 1,373.6 crore from Rs 1,478.5 crore and EBITDA is likely to be at 51.6% versus 56.8% year-on-year and 54.8% QoQ.

On quarter-on-quarter basis, company's revenues are seen going up by 2.7% while EBITDA seen down 3.4% and PAT is expected to fall 3.6%.

Factors:

Volume growth to sustain earnings growth:

Zinc and silver volumes are likely to be strong on the back of new capacity
>Zinc and lead capacity has been expanded to 1,064ktpa recently
>Silver capacity will be expanded to 500tpa along with lead smelter

Silver production to get a boast as HZ commissioned silver refinery and ramped up SK mines and new 100ktpa lead smelter at Dariba

Base metal premium, concentrate sales and silver sales volume and realization

Rupee also depreciated against USD has arrested fall in domestic metal prices to some extent

Metal volumes and rupee depreciation to compensate for lower LME:

LME zinc and lead prices have declined QoQ by 18% and 17% but rupee depreciation of 9-10% during the quarter has helped

Though financial performance will remain subdued due to correction in zinc and lead prices

PAT is likely to be helped by an increase in other income