Hindustan Zinc Ltd (Q4 FY15) – BUY
CMP Rs168, Target Rs210, Upside 25%
CMP Rs168, Target Rs210, Upside 25%
- HZL’s operational performance was better than our expectations on the back of strong mined metal production
- Positive impact of higher production was marginally offset by provision for DMF and jump in wage costs (conclusion of wage agreement)
- Mined metal output during the quarter stood at 0.27mn tons, its highest ever quarterly production
- Cost of production increased marginally on a qoq basis due to higher wage costs
- Management has guided for strong refined metal growth in FY16
- HZL remains one of our preferred picks in metal sector due to inexpensive valuations and firm zinc prices
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