Hindustan Zinc Q4 PAT seen down 19% at Rs 1,434 cr

Sales are seen going down by 4% at Rs 3,060 crore from Rs 3,197.02 crore year-on-year.            

EBITDA too is likely to fall by 17% to Rs 1,596 crore in the January-March quarter of FY12 versus Rs 1,928.19 crore. EBITDA margin is seen declining at 52.2% versus 60.3% during the same period.

Highlights

Topline impacted by lower LME prices though rupee depreciation will provide some relief on a y-o-y basis:
**LME prices have corrected on a YoY basis and zinc prices are down 15% to USD 2028/tonne though up 6.4% QoQ
**Lead stood at USD 2092/tonne, up 5% QoQ but lower by 19.6% YoY
**Net sales likely to increase sequentially on higher LME prices and better sales volume in lead and silver segments
**QoQ LME prices have increased but impact will be marginally offset by stronger INR (+1.4%QoQ)

Fear remains that Zinc and lead prices are unlikely to see any major upside as the market remains in surplus

China’s demand environment for zinc remains positive because of the focus on value addition

EBITDA margins under pressure (y-o-y) due to fall in metal realizations and sharp escalation in operating costs