Hindustan Zinc Q3 Results Review - Acquisition To Set Stage For Next Leg Of Growth: Systematix
To acquire Vedanta’s Zinc International assets for $2.98 billion.
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Systematix Research Report
Hindustan Zinc Ltd.’s Q3 FY23 Ebitda of Rs 37.1 billion (down 15.2% YoY and down 15.9% QoQ) was 6% above our estimate, mainly on lower costs.
At 210 thousand tonne, zinc volumes were -1.9%/+11.1% YoY/QoQ.
Zinc/lead prices averaged at $3,001/tonne/$2,098/tonne (-10.8%/-10% YoY), respectively, while silver prices at $21.2/ounce fell 9.4% YoY.
Before royalty, zinc’s cost of production was $1,293/tonne, +12.6%/+2.7% YoY/QoQ, largely due to elevated coal prices and lower linkage coal availability.
We keep our FY23E zinc price assumption unchanged at $3,300/tonne while revising it upward to $3,200/tonne from $3,000/tonne for FY24E.
As a result, we have revised our FY23E/24E Ebitda by -5%/+4%, respectively, based on a mix of stable near-term zinc price and cost assumptions.
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