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Hindustan Zinc: A bet on faster recovery and attractive valuation

Strong recovery in Q2 and improving earnings visibility should rerate HZL stock as valuations remain attractive

October 21, 2020 / 02:55 PM IST
Hindustan Zinc: A bet on faster recovery and attractive valuation

PRO Only Highlights
Quarterly performance largely backed by improved realisations
Medium-term triggers China plus and protectionist measures for tyre industry
Valuations not inexpensive; but improved medium-term outlook

Contrary to Street apprehensions, the recovery in steel sector demand and prices has led to a sharp recovery in the zinc market and realisations per tonne. During the September 2020 quarter, LME zinc prices averaged at around $2340 a tonne, up 19 percent on a quarter-on-quarter basis. This is also reflecting in the financial performance of companies like Hindustan Zinc, with strong growth in revenue and profitability. Interestingly, the company indicated that the second half of the current fiscal...

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