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Segment Percentage of Revenue Percentage of Profit: Share Price Chart

Hindustan Zinc is the largest zinc-lead miner globally, producing 87% of its revenue and 74% of profits from zinc and lead. It has mines, smelters, and refineries located in India, and is the lowest cost producer of zinc globally. Despite being a commodity company, Hindustan Zinc consistently generates free cash flows and maintains returns of around 25% due to zinc and lead prices being above its production costs of $1,000 per tonne. It has no debt and a strong balance sheet.

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115 views3 pages

Segment Percentage of Revenue Percentage of Profit: Share Price Chart

Hindustan Zinc is the largest zinc-lead miner globally, producing 87% of its revenue and 74% of profits from zinc and lead. It has mines, smelters, and refineries located in India, and is the lowest cost producer of zinc globally. Despite being a commodity company, Hindustan Zinc consistently generates free cash flows and maintains returns of around 25% due to zinc and lead prices being above its production costs of $1,000 per tonne. It has no debt and a strong balance sheet.

Uploaded by

sachin2727
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Segment Percentage Percentage

• Basic stats: of revenue of profit


✓ Market capitalisation: Rs. 70,668 crore
✓ PE: 9.5 (10 year median: 10.1; range 5.9 – 19.7) Zinc and Lead 87% 74%
✓ PB: 1.8 (10 year median: 2.1; range 1.2 – 3.9) Integrated manufacturing of zinc and lead from own mines,
smelters and refineries located in Rajasthan and Uttarakhand
✓ Dividend yield: 12%
✓ Gross cash (30/9/2019): Rs. 19,647 crore HZL has a domestic market share of 75% in zinc and 57% in lead
✓ Gross debt (30/9/2019): Rs. 2,584 crore
Silver 12% 25%
✓ Shareholders: Vedanta 64.92%; Government of India 29.54%
✓ Stock down 39% in the last one year and 14% in the last three months
• End user of Zinc: Steel companies
• End user of Lead: Battery manufacturers
• Global position
✓ 2nd largest zinc-lead miner globally; set to become the largest in the next two years
✓ 9th largest silver producer globally; on track to become top five largest globally in next
Share Price chart
three years
350 20
✓ One of the lowest cost producers of zinc; ranks in the 1st decile position globally 18
300
16
250 14
12
• Financial position 200
10
150 8
✓ Has not incurred a loss since the FY 1997
100 6
✓ Generates tonnes of free cash flows and has been net free cash flows positive since FY 4
50
2
2006 0 0

04-Dec-12

04-Dec-17
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✓ Negative working capital; receivable days of 4 days
✓ Despite being a commodity company; earns a consistent ROCE and ROE of 25% and 20%
Close (Unit Curr) TTM PE(x) P/BV(x)
• Compared to other commodities, zinc and lead markets are more balanced where the supply closely tracks demand
• The cost of extraction of Hindustan Zinc is $1,000/tonne which is much below the market price of $2,000/tonne, so it consistently makes money
1,500
2,000
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4,000
4,500

1,000
5,000

0
500
Apr-95

Oct-96

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Zinc price $/tonne

Apr-10

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Apr-19
1,903.63

1,000
2,000
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3,500

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4,000

0
500

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Lead price $/tonne

Apr-10

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Apr-19
1,734.44

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