Hindustan Zinc, a subsidiary of Vedanta Resources Plc, is expected to report stellar performance in December quarter. Profit is seen rising 32 percent year-on-year to Rs 2,400 crore and revenue may jump 49 percent to Rs 5,100 crore in Q3, according to average of estimates of analysts polled by CNBC-TV18.
Operating profit is likely to increase 89 percent to Rs 2,800 crore and margin may expand 1,180 basis points to 54.9 percent compared with year-ago quarter due to normalisation in production and higher product prices. Cost of production is expected to be lower due to operating leverage coming from higher volume.
The company is expected to get a Rs 400-500 crore due to excise duty.
Zinc has been the big outperforming base metal this year. Rally can be attributed to depleting supply on account of mine closures and demand growth from China.
Mined metal production may increase 21 percent year-on-year and 44 percent sequentially.
Sequentially higher volumes from Rampura Agucha open cast mine was in accordance with mine plan while YoY higher may be because of higher volumes from both underground and open cast mine of Rampura Agucha mine.
Key issues to watch for would be delay in recovery of volumes at Rampura Agucha, decline in global zinc prices and restart of any of the shutdown global mines.
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