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Hindustan Zinc Q2 PAT seen up 3% at Rs 1385 cr

Hindustan Zinc's profit after tax is likely to grow by 3 percent to 1,385.2 crore in the quarter ended September 2012 from Rs 1,344.5 crore in a year ago period.

October 18, 2012 / 12:11 PM IST
 
 
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Hindustan Zinc's profit after tax is likely to grow by 3 percent to 1,385.2 crore in the quarter ended September 2012 from Rs 1,344.5 crore in a year ago period.


Net sales are seen going up by 4.9 percent YoY to Rs 2,720 crore. Earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to be flat at Rs 1,420 crore compared to Rs 1,421.5 crore in the corresponding quarter of last fiscal.


Analysts on an average expect EBITDA margin at 52.2 percent in three months ended September 2012 as against 54.8% in a year ago quarter and 51.4 percent in previous quarter.


On quarter-on-quarter basis, Hindustan Zinc's profit after tax is likely to go fall by 12 percent owing to one-time gain and higher tax rate in June quarter. Net sales are expected to be flat while EBITDA is seen going up by 2 percent.


Government’s (29.5 percent) stake sale in Hindustan Zinc remains a key near-term trigger.


Production:


Zinc production will be impacted due to deterioration of ore grade at Rampura Agucha mine.


Maintenance shutdown at its lead smelter will also impact its production. Analysts expect zinc and lead sales to be 161kte and 29kte, respectively in Q2FY13.


Current metal production has been lower in H1FY13 as per mining plan which is expected to improve in 2HFY13


Lower volume and lower LME prices will result in EBITDA margin compression:


LME zinc for the quarter declined QoQ by around 2.4% to USD 1885 per tonne. Silver gained 3% during the quarter to USD 30 an ounce.


LME copper have dropped on a YoY basis but prices have been supported by rupee depreciation that fell by 20%.


Zinc prices dropped 15% YoY and have fell by 3% QoQ. Lead prices have fallen 18% YoY and are flat on a QoQ basis.

Silver declined 18% YoY and are up by 1.6% on a QoQ basis.

first published: Oct 18, 2012 10:10 am

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