Hindustan Zinc Q1 Assessment – Earnings Outlook Stays Sturdy, However Priced In: Motilal Oswal

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The results of Hindustan Zinc Ltd. Q1 FY22 were impacted by lower production weighed down by the second wave of Covid-19 and higher production costs that were partially offset by higher metal prices.

While Ebitda was down 8% year-over-year to Rs 35.6 billion, a higher tax rate of 34% (due to the change in the income mix and the elimination of tax incentives) resulted in a 15% decrease in adjusted profit after tax to 21, Rs 2 billion

We have lowered our estimate of earnings per share for FY 22/23 by 6% / 9%, largely taking into account the higher tax rate.

We expect an average annual growth rate of 9% of the zinc volume in Hindustan over the period 21-23 E, which would result in an Ebitda CAGR of 21%.

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Motilal Oswal Hindustan Zinc Q1GJ22 Result Update.pdf

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