Hindustan Zinc gains 2%; BoFAML initiates buy, volumes to grow at CAGR of 13% over FY17-20
Shares of Hindustan Zinc gained 2 percent intraday Wednesday as foreign broking firm Bank of America Merrill Lynch (BoFAML) has initiated buy rating with a target price of Rs 345 per share.
According to the broking house the elevated prices will coincide with revival in volume growth. It expect high dividend payout given the significant cash needs of the parent.
Zinc is our favored exposure with strong fundamentals and captive access to 100 percent of its requirements allows to capture the benefit of positive pricing outlook for zinc, it added.
The firm expect the volumes is likely to grow at CAGR of 13 percent over FY17-20.
The premium valuations are justified by strong zinc price outlook and superior profitability, it said.
At 12:20 hrs Hindustan Zinc was quoting at Rs 313.35, up Rs 3.45, or 1.11 percent on the BSE.
The share touched its 52-week high Rs 333.40 and 52-week low Rs 226.75 on 03 February, 2017 and 25 May, 2017, respectively.
Currently, it is trading 6.01 percent below its 52-week high and 38.19 percent above its 52-week low
Posted by Rakesh Patil