{"id":13506,"date":"2018-04-10T17:31:22","date_gmt":"2018-04-10T12:01:22","guid":{"rendered":"https:\/\/blog.fundsindia.com\/blog\/?p=13506"},"modified":"2018-04-10T17:37:44","modified_gmt":"2018-04-10T12:07:44","slug":"hindustan-zinc-limited","status":"publish","type":"post","link":"https:\/\/fundsindia.com\/blog\/equities\/hindustan-zinc-limited\/13506","title":{"rendered":"Hindustan Zinc Limited"},"content":{"rendered":"<p><strong>Capacity Addition + Strong Price Outlook = Sustained Growth Momentum :<\/strong> Hindustan Zinc Limited (HZL) is the India\u2019s largest and world\u2019s second-largest zinc miner. It caters to ~80% of zinc demand in India. The company has also the world&#8217;s second largest operating zinc mine \u2013 Rampura Agucha Mine. HZL\u2019s business comprises of mining and smelting of zinc and lead along with captive power generation. It is the only integrated zinc manufacturer in India, with zinc smelting capacity of 823 ktpa and lead smelting capacity of 185 ktpa.<\/p>\n<p><strong>Valuation:<\/strong> Although, we expect strong near-term zinc prices due to tight inventories, some correction in FY20 is expected due to new supplies coming in. Therefore, we build-in LME zinc prices of US$3,186\/ton for FY19E and US$3,059\/ton for FY20E. We like HZL given its strong balance sheet, robust fundamentals, lower cost of production, integrated business model, debt free status and healthy dividend yield. We project the top line and EBITDA to clock a CAGR of 15.6% and 16.3%, respectively over FY17-20E driven by strong outlook on zinc and HZL&#8217;s quality operations. Hence, we recommend BUY rating on the stock with a target price of Rs 345 where we value the stock at its three year mean of 7x FY20E EV\/EBITDA.<br \/>\nRating<\/p>\n<p><a href=\"https:\/\/www.fundsindia.com\/blog\/wp-content\/uploads\/2018\/04\/Research-Report-Hindustan-Zinc-Limited.pdf\">Research Report &#8211; Hindustan Zinc Limited<\/a><\/p>\n<p><i>Investments in equity shares, debentures, etc., are not obligations of, or guaranteed by Wealth India Financial Services Pvt. Ltd., and are subject to investment risks.\u00a0<a href=\"http:\/\/pages.fundsindia.com\/pages\/disclaimer-equities\/\">Click here<\/a>\u00a0to read our full disclaimer.<\/i><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Capacity Addition + Strong Price Outlook = Sustained Growth Momentum : Hindustan Zinc Limited (HZL) is the India\u2019s largest and world\u2019s second-largest zinc miner. It caters to ~80% of zinc demand in India. The company has also the world&#8217;s second largest operating zinc mine \u2013 Rampura Agucha Mine. HZL\u2019s business comprises of mining and smelting [&hellip;]<\/p>\n","protected":false},"author":14,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[59],"tags":[545],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v17.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Hindustan Zinc Limited<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fundsindia.com\/blog\/equities\/hindustan-zinc-limited\/13506\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Hindustan Zinc Limited\" \/>\n<meta property=\"og:description\" content=\"Capacity Addition + Strong Price Outlook = Sustained Growth Momentum : Hindustan Zinc Limited (HZL) is the India\u2019s largest and world\u2019s second-largest zinc miner. It caters to ~80% of zinc demand in India. The company has also the world&#8217;s second largest operating zinc mine \u2013 Rampura Agucha Mine. 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