Hindustan Zinc Ltd Eyes Growth Amidst Market Dynamics

Hindustan Zinc Ltd Eyes Growth Amidst Market Dynamics/Mint

Nadia Nawaz | April 24, 2024 | 07:31 PM IST | Breaking News | Follow on Google News

Hindustan Zinc Ltd Eyes Growth Amidst Market Dynamics

Hindustan Zinc Ltd Eyes Growth Amidst Market Dynamics

Highlights:

1. Hindustan Zinc Ltd (HZL) anticipates a 20% increase in Ebitda for FY25 and FY26, buoyed by strong demand and potential zinc price upturn.
2. Q4FY24 saw a decline in HZL’s revenue by 11% YoY to ₹7,550 crore due to lower realizations and subdued volume growth.
3. Despite a recent 40% stock gain, uncertainties loom around government stake exit and limited upside potential.
4. Zinc, constituting nearly two-thirds of revenue, faced a 25% price drop in FY24, impacting Ebitda, although cost reductions partly mitigated the impact.
5. HZL foresees continued demand strength, particularly in the steel sector, and potential zinc price increases in 2024, supported by a supply deficit.

Hindustan Zinc Ltd (HZL) anticipates robust growth prospects amidst market challenges. Despite a decline in revenue and Ebitda in Q4FY24, the company remains optimistic about future performance, with expectations of a 20% increase in Ebitda for FY25 and FY26. However, challenges persist, including uncertainties surrounding government stake divestment and limited upside potential despite recent stock gains.

The company’s reliance on zinc, which constituted almost two-thirds of revenue in Q4FY24, underscores the impact of zinc price volatility. Despite a 25% price drop in FY24, HZL managed to mitigate the impact through cost reduction measures. Continued strength in domestic zinc demand, particularly from the steel sector, and potential price upturns in 2024, could bolster HZL’s performance.

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While HZL’s cash position has weakened in recent years, it remains capable of meeting its capital expenditure requirements. With a focus on ramping up mining capacity over the next five years, HZL aims to sustain growth momentum. However, investors should monitor the company’s cash position closely amidst evolving market dynamics and investment plans.

Nadia Nawaz

Nadia Nawaz – a new journo in digital journalism covers stories, reports/articles from Pakistan. Nadia writes on various topics, include Politics, Economy,Sports and finance. she further holds a high head in field of graphic designing. Nadia can be reached on nawaznadia20@gmail.com