Neutral Hindustan Zinc; target of Rs 268: Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal's research report on Hindustan Zinc

Hindustan Zinc (HZ)’s 3QFY21 results were strong, as expected, with EBITDA up 43% YoY on higher volumes and prices. While silver business remained strong with EBIT of INR10.1b (37% of total), zinc realized premiums recovered to pre-COVID levels as the share of domestic volumes improved in 3Q. n As major projects near completion, we expect 9% CAGR in HZ volumes over FY21-23E, driving an 18% CAGR in EBITDA. However, we believe this growth is factored in the current valuation and hence we rate it Neutral.

Outlook

We thus remain Neutral, with TP of INR268/share, based on 6.0x FY22E EV/EBITDA. The stock trades at 6.4x FY22E EV/EBITDA, which we believe prices in attractive dividend yield and potential EBITDA growth.

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