Results     20-Apr-24
Analysis
Hindustan Zinc
NP down 21%
Consolidated net sales (including other operating income) of Hindustan Zinc has declined 11.28% to Rs 7549 crore during Q4FY24 compared to Q4FY23.  Sales of Zinc,Leadand Silver segment has gone down 12.02% to Rs 7,262.00 crore (accounting for 99.68% of total sales).  Sales of Wind Energy segment has gone down 14.81% to Rs 23.00 crore (accounting for 0.32% of total sales).

Revenue from operations during the quarter was up 3% q-o-q on account of better zinc volumes partly offset by lower lead & silver volumes, and lower metal prices. The revenue plunged by 11% y-o-y on account of significantly lower zinc & lead prices and lower lead volume, partly offset by increased zinc & silver volumes, silver prices and favourable exchange rates.

Profit before interest, tax and other unallocable items (PBIT) has slumped 17.26% to Rs 2,746.00 crore.  PBIT of Zinc,Leadand Silver segment fell 17.20% to Rs 2,740.00 crore (accounting for 99.78% of total PBIT).  PBIT of Wind Energy segment fell 40.00% to Rs 6.00 crore (accounting for 0.22% of total PBIT). 

PBIT margin of Zinc,Leadand Silver segment fell from 40.09% to 37.73%.  PBIT margin of Wind Energy segment fell from 37.04% to 26.09%.  Overall PBIT margin fell from 40.08% to 37.69%. 

Operating profit margin has declined from 50.01% to 48.34%, leading to 14.24% decline in operating profit to Rs 3,649.00 crore.  Employee cost increased from 2.49% to 2.93%.   Other expenses rose from 48.95% to 50.03%.   Selling and administration expenses fell from 12.79% to 12.42%.   Power and Oil fuel cost fell from 9.61% to 8.77%.  

Other income fell 22.88% to Rs 273 crore.  PBIDT fell 14.91% to Rs 3922 crore.  Provision for interest rose 48.86% to Rs 262 crore. 

PBDT fell 17.44% to Rs 3660 crore.  Provision for depreciation rose 0.97% to Rs 937 crore.  Fixed assets declined from Rs 19,767.00 crore as of 31 March 2023 to Rs 19,667.00 crore as of 31 March 2024.  Intangible assets increased from Rs 92.00 crore to Rs 180.00 crore. 

Profit before tax down 22.31% to Rs 2,723.00 crore.  Share of profit/loss were nil in both the periods.  Provision for tax was expense of Rs 685 crore, compared to Rs 922 crore.  Effective tax rate was 25.16% compared to 26.31%.

Minority interest was nil in both the periods.  Net profit attributable to owners of the company decreased 21.10% to Rs 2,038.00 crore. 

Equity capital stood at Rs 845.00 crore as of 31 March 2024 to Rs 845.00 crore as of 31 March 2023.  Per share face Value remained same at Rs 2.00. 

Promoters’ stake was 64.92% as of 31 March 2024 ,compared to 64.92% as of 31 March 2023 .  Promoters pledged stake was 99.37% as of 31 March 2024 ,compared to 87.59% as of 31 March 2023.

Commenting on the performance, Mr. Arun Misra, CEO, said: “FY 2023-24 has been a year of solid growth for HZL, with mined metal, refined metal, and silver recording its highest historic production levels, supported by a backdrop of fatality-free operations. As part of our strategy, it was driven by our increased focus on silver & metal production and cost optimisation. The company withstood the market headwinds during the year, ensuring preservation of margins and shareholder value. Fuelled by our robust silver maximisation strategy, I am thrilled to announce that HZL has now become the 3rd largest silver producer globally. Additionally, during the quarter, HZL also incorporated ‘Hindmetal Exploration Services Private Limited’, as a wholly owned subsidiary, with an objective to explore, discover, develop and tap mineral resources aligning with the national focus and vision.

Our commitment on the sustainability efforts remains robust. I am happy to share that our renewable energy (RE) power delivery agreement of 450 MW is advancing well and the first flow of RE power is now preponed and expected to begin in April’24, contributing to our journey towards achieving net zero targets. Our company has been awarded the CII National HR Excellence Award underscoring our exemplary people practices. With the full implementation of commissioned projects, HZL is poised for another exceptional year ahead.” 

Mr. Sandeep Modi, CFO, said: “Despite the plunging metal prices, HZL has consistently sustained its margin at a steady 47% by recording its fifth consecutive quarter of sustained cost reduction, clocking the lowest cost in last 3 years. This demonstrates the effectiveness of our agile decision-making strategy, with instances such as maximization of silver production leveraging the soaring silver prices, power plant modifications ensuring better linkage coal consumption thereby lowering the power costs along with operational & commercial efficiencies. I firmly believe that the challenges encountered throughout the year have strengthened our resilience and fortitude, propelling us to strive for even greater performance in the upcoming year towards our aspired annual targets and strong balance sheet.”

Operational Performance

Mined metal production for the quarter was 299 kt, up 11% sequentially, driven by higher ore production across mines, further supplemented by improved mined metal grades, but marginally down y-o-y. The full year mined metal recorded the best-ever production of 1,079 kt, up 2% y-o-y on account of improved mined metal grades. Refined metal production for the quarter stood at 273 kt, its highest-ever. The production was up 6% sequentially on account of better plant availability, and up 1% y-o-y. Refined metal production for the full year stood at its highest-ever, reaching 1,033 kt, marginally up y-o-y.

Refined zinc production for the quarter was 220 kt, up 9% sequentially and 2% y-o-y. Refined lead production for the quarter was 53 kt, down 5% sequentially and 2% y-o-y. For the full year, refined zinc production stood at 817 kt, marginally down y-o-y, and refined lead production was at 216 kt, up 3% y-o-y, on account of pyro operations being operated on lead mode for longer duration during the year to maximize silver production.

Saleable silver production for the quarter was 189 MT, down 4% q-o-q in line with lead metal production, partly offset by WIP depletion, and up 4% y-o-y on account of WIP depletion during the quarter. Full year saleable silver production stood at its ever highest of 746 MT, up 5% y-o-y in line with lead metal production.

Full year results analysisNet sales (including other operating income) of Hindustan Zinc has declined 15.15% to Rs 28932 crore.  Sales of Zinc,Leadand Silver segment has gone down 15.68% to Rs 27,926.00 crore (accounting for 99.44% of total sales).  Sales of Wind Energy segment has gone up 2.63% to Rs 156.00 crore (accounting for 0.56% of total sales). 

Profit before interest, tax and other unallocable items (PBIT) has slumped 28.27% to Rs 10,389.00 crore.  PBIT of Zinc,Leadand Silver segment fell 28.36% to Rs 10,307.00 crore (accounting for 99.21% of total PBIT).  PBIT of Wind Energy segment fell 13.68% to Rs 82.00 crore (accounting for 0.79% of total PBIT). 

PBIT margin of Zinc,Leadand Silver segment fell from 43.44% to 36.91%.  PBIT margin of Wind Energy segment fell from 62.50% to 52.56%.  Overall PBIT margin fell from 43.53% to 37.00%. 

Operating profit margin has declined from 51.34% to 47.20%, leading to 21.99% decline in operating profit to Rs 13,656.00 crore.  Employee cost increased from 2.47% to 2.85%.   Other expenses rose from 46.41% to 50.21%.   Selling and administration expenses rose from 11.88% to 12.09%.   Power and Oil fuel cost fell from 10.84% to 9.77%.  

Other income fell 22.12% to Rs 1074 crore.  PBIDT fell 22% to Rs 14730 crore.  Provision for interest rose 186.79% to Rs 955 crore.  Loan funds declined from Rs 11,881.00 crore as of 31 March 2023 to Rs 8,722.00 crore as of 31 March 2024.  Inventories rose to Rs 1,926.00 crore as of 31 March 2024 from Rs 1,862.00 crore as of 31 March 2023.  Sundry debtors were lower at Rs 155.00 crore as of 31 March 2024 compared to Rs 380.00 crore as of 31 March 2023.  Cash and bank balance declined from Rs 1,412.00 crore as of 31 March 2023 to Rs 175.00 crore as of 31 March 2024.  Investments rose to Rs 10,452.00 crore as of 31 March 2024 from Rs 10,107.00 crore as of 31 March 2023 . 

PBDT fell 25.75% to Rs 13775 crore.  Provision for depreciation rose 6.25% to Rs 3468 crore.  Fixed assets declined from Rs 19,767.00 crore as of 31 March 2023 to Rs 19,667.00 crore as of 31 March 2024.  Intangible assets increased from Rs 92.00 crore to Rs 180.00 crore. 

Profit before tax down 32.58% to Rs 10,307.00 crore.  Share of profit/loss were nil in both the periods.  Provision for tax was expense of Rs 2548 crore, compared to Rs 4777 crore.  Effective tax rate was 24.72% compared to 31.25%.

Minority interest was nil in both the periods.  Net profit attributable to owners of the company decreased 26.18% to Rs 7,759.00 crore. 

Equity capital stood at Rs 845.00 crore as of 31 March 2024 to Rs 845.00 crore as of 31 March 2023.  Per share face Value remained same at Rs 2.00. 

Promoters’ stake was 64.92% as of 31 March 2024 ,compared to 64.92% as of 31 March 2023 .  Promoters pledged stake was 99.37% as of 31 March 2024 ,compared to 87.59% as of 31 March 2023 . 

Cash flow from operating activities decreased to Rs 13,346.00 crore for year ended March 2024 from Rs 15,162.00 crore for year ended March 2023.  Cash flow used in acquiring fixed assets during the year ended March 2024 stood at Rs 3,866.00 crore, compared to Rs 3,594.00 crore during the year ended March 2023. 

The scrip is currently trading at Rs 398 

 

Hindustan Zinc : Consolidated Results

Particulars

2403 (03)

2303 (03)

Var.(%)

2403 (12)

2303 (12)

Var.(%)

Net Sales

7,549

8,509

-11

28,932

34,098

-15

OPM (%)

48.3

50.0

 

47.2

51.3

 

OP

3,649

4,255

-14

13,656

17,506

-22

Other Inc.

273

354

-23

1,074

1,379

-22

PBIDT

3,922

4,609

-15

14,730

18,885

-22

Interest

262

176

49

955

333

187

PBDT

3,660

4,433

-17

13,775

18,552

-26

Depreciation

937

928

1

3,468

3,264

6

PBT

2,723

3,505

-22

10,307

15,288

-33

Share of Profit/(Loss) from Associates

0

0

-

0

0

-

PBT before EO

2723

3505

-22

10307

15288

-33

EO Income

0

0

-

0

0

-

PBT after EO

2723

3505

-22

10307

15288

-33

Taxation

685

922

-26

2548

4777

-47

PAT

2038

2583

-21

7759

10511

-26

Minority Interest (MI)

0

0

-

0

0

-

Net profit

2038

2583

-21

7759

10511

-26

EPS (Rs)*

4.82

6.11

-21

18.36

24.88

-26

Notes

* EPS is on current equity of Rs 845.06 crore, Face value of Rs 2, Excluding extraordinary items.

# EPS is not annualised

bps : Basis points

EO : Extraordinary items

Figures in Rs crore

Source: Capitaline Corporate Database

 

 

 

Hindustan Zinc : Consolidated Segment Results

 

% of (Total)

2403 (03)

2303 (03)

Var.(%)

% of (Total)

2403 (12)

2303 (12)

Var.(%)

Sales

Zinc,Leadand Silver

100

7262

8254

-12

99

27926

33120

-16

Wind Energy

0

23

27

-15

1

156

152

3

Total Reported Sales

100

7285

8281

-12

100

28082

33272

-16

Less: Inter segment revenues

 

0

0

-

 

0

0

-

Net Sales

100

7285

8281

-12

100

28082

33272

-16

PBIT

Zinc,Leadand Silver

100

2740

3309

-17

99

10307

14388

-28

Wind Energy

0

6

10

-40

1

82

95

-14

Total PBIT

100

2746

3319

-17

100

10389

14483

-28

Less : Interest

 

262

176

49

 

955

333

187

Add: Other un-allcoable

 

239

362

-34

 

873

1138

-23

PBT

100

2,723

3,505

-22

100

10,307

15,288

-33

 

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