Hind Zinc

Thanks to the 31% rise in zinc prices   in the year to June-end 2017, this Vedanta group company posted a very good 81% (YoY) jump in net profit at Rs.1876 crore. This was on a 61% increase in total income at Rs.5543 crore. Revenue from zinc rose 97%; lead was up 75% and silver rose 21%. The 2% rise in cost of production for zinc due to higher coal and commodity prices was offset by higher volumes.

These are spectacular numbers but only because some analysts expected more and that did not come through, many TV channels went on to declare this as a “mixed” performance. How is 81% increase in net profit in any way “mixed?”

EBITDA for the quarter rose by a whopping 80.5% at Rs.2744 crore and the margins rose by 53 bps to 54.7%.

The company had set itself a target of 900 kilo tonne for zinc-lead and 500 mt of silver and it managed to meet the targets. The company has set itself a target of 1.2 mtpa of mined metal capacity by 2019-20 and seems to be well placed to meet the guidance.

The company’s equity is huge, as expected, at Rs.845 crore. Reserve is at Rs.29,960 crore.  The company’s cash at end of June 2017 stood at Rs.16,998 crore.