Hindustan Zinc Q4 Review - Revenue, Ebitda Inline; Higher Depreciation, Finance Costs Dent APAT: Motilal Oswal

Motilal Oswal Report

Hindustan Zinc Ltd.’s revenue came in at Rs 85 billion (down 3% YoY and up 8% QoQ) in Q4 FY23, in line with our estimate.

Ebitda stood at Rs 43 billion (down 14% YoY and up 15% QoQ), in line with our estimate. The improved performance QoQ was aided by lower power and fuel costs (Rs 8 billion; up 9% YoY/down 16% QoQ), higher volumes and better London Metal Exchange movement. Ebitda margin stood at 50% (up 288 bps QoQ).

The cost of production fell to $1,214/tonne in Q4 FY23 from $1,293/tonne in Q3 FY23. The reduction in CoP was driven by the softening in coal prices by ~$80/tonne and a strong operational performance.

Adjusted profit after tax came in at Rs 26 billion (down 12% YoY and up 20% QoQ), below our estimate of Rs 28 billion. It was impacted by higher depreciation and interest costs, which were partially offset by lower taxes and higher other income.

Refined zinc sales for Q4 FY23 stood at 216 thousand tonne (up 1% YoY and up 3% QoQ), refined lead sales came in at 54 thousand tonne (up 10% YoY and 17% QoQ), and silver sales stood at 182 tonne (up 12% YoY and 13% QoQ). The improvement was driven by better plant availability and mined metal availability.

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