Hindustan Zinc Q4 net seen up 29%, revenue may grow 88% on higher volume, pricing

Hindustan Zinc, the subsidiary of Vedanta Resources Plc, is expected to show a healthy 29 percent growth in profit at Rs 2,764 crore in January-March quarter compared with Rs 2,149 crore in year-ago period. Profit in Q4FY16 included a tax credit. Likely lower other income may restrict profit growth.

Revenue during the quarter is seen rising 88 percent to Rs 5,900 crore compared with same quarter last fiscal, according to average of estimates of analysts polled by CNBC-TV18.

Analysts believe Hindustan Zinc should report its best-ever quarterly EBITDA on the back of higher commodity prices and higher volumes, and stable cost.

Operating profit is likely to surge 156 percent year-on-year to Rs 3,347 crore and margin may expand 1490 basis points to 56.7 percent in the quarter gone by.

Zinc has been the big outperforming base metal this year due to depleting supply on account of mine closures at global level that led prices higher.

Zinc price during the quarter surged 65 percent year-on-year and 11 percent quarter-on-quarter while lead gained 31 percent YoY and 7 percent QoQ. Silver rose 19 percent YoY and was flat QoQ.

Production numbers also looked strong and so sales should come in higher than estimates, analysts believe.

Additionally, there will be external zinc concentrate sales which may further aid topline, analysts say. Volumes may be aided by higher sales from the Rampura Agucha mines, SK mines and also capacity ramp up at Zawar mines.

Key issues to watch for would be decline in global zinc prices and production issues.