Hindustan Zinc Q3 Results Review - Revenue Inline; Power, Input Costs Drag Profits: Motilal Oswal

Motilal Oswal Report

Hindustan Zinc Ltd.’s revenue at Rs 79 billion (down 2% YoY and 6% QoQ) in Q3 FY23 was inline with our estimate. Revenue was marginally lower YoY, on the back of lower London Metal Exchange prices coupled with lower refined metal volumes.

Ebitda at Rs 37 billion (down 15% YoY and 16% QoQ) was in line with our estimates. Power and fuel costs were at Rs 10 billion (up 43% YoY and 2% QoQ), driven by elevated coal prices and lower coal linkages in Q3 FY23.

Ebitda margin stood at 47% (lower by 580 bps QoQ), on the back of higher input costs, partially offset by lower royalty expense.

Hindustan Zinc's cost of production for Q3 FY23 stood at $1,293/tonne, up 3% QoQ and 13% YoY (up 24% YoY and 6% QoQ in Indian rupee terms) on the back of higher input costs and coal prices and lower coal linkages.

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