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Hold Hindustan Zinc; target of Rs 235: Prabhudas Lilladher

January 23
22:24 2020

Prabhudas Lilladher’s research report on Hindustan Zinc

Hindustan Zinc (HZ) reported earnings in line with ours/consensus estimates. Earnings visibility continued to remain weak due to deteriorating ore grade and resultant higher cost of production (CoP). Zinc prices moved up by 5% in last one month due to production restrictions in China and improvement in sentiments related to USA-China Trade war.

Outlook

However, we do not see prices to sustain for long due to weaker demand. We maintain HOLD with TP of Rs235, EV/EBITDA of 6x FY21e.

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