500% Dividend, 1:1 Bonus Issue: Vedanta Subsidiary Jumps 133% YTD, Buy Or Sell?

Vedanta Limited's subsidiary Hindustan Zinc Ltd (HZL) shares continue to witness rally. In last 2-weeks only, Hindustan Zinc shares offered attractive return of 41% and jumped 132.87% year-to-date thus more than doubling investors' money. The key factor that primarily pushed the Hindustan Zinc shares prices to new high has been attributed to sharp rally in silver prices. Hindustan Zinc also registered its highest ever silver production this year and emerged third largest silver producer globally.

In last 10, days, silver prices India zoomed by 8600 and declined by Rs 6,200. Current market price of 1 kg silver in India is Rs 91,500 as on May 26, 2024. It is worth mentioning that silver led to nearly 19% of Hindustan Zinc's total sales. As per experts, there is a likelihood that Hindustan Zinc's silver sales will rally more than 27% to Rs 6,840 crore by next fiscal year or FY25.

Hindustan Zinc Trades Ex-Dividend: Earlier, as per BSE filing dated May 7, 2024, the company gave approval to the Interim Dividend of Rs. 10/- per equity share i.e. 500% on face value of Rs. 2/- per equity share for the Financial Year 2024-25 amounting to Rs. 4,225.32 Crores. It set the record date as May 15, 2024 and the Interim Dividend shall be duly paid within the stipulated timelines as prescribed under law, added the BSE filing.

Hindustan Zinc Q4: The company declared a fall of 21% year-on-year (YoY) in its Q4 net profit to Rs 2038 crore due to depressed zinc price all over the globe as demand has been surging at a lower rate than supply. It declared its consolidated net profit at Rs 2,583 crore for the corresponding quarter of last year. Sequentially, net profit surged 0.5% from Rs 2028 crore in Q3. Its revenue from operations for the March 2024 quarter declared at Rs 7,285 crore, down 12% from Rs 8281 crore declared an year ago. Meanwhile, the company's consolidated EBITDA declared at Rs 3637 crore for the quarter ended March 31, 2024, down 14% as against Rs 4208 crore declared in the similar quarter of last year. The firm said that the decline in revenue was because of lower zinc and lead prices and lower lead volume partly offset by higher silver and zinc volumes, silver prices, and favourable exchange rates, as per the bse filing.

"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," Hindustan Zinc's chief financial officer Sandeep Modi.

Hindustan Zinc Share Performance: The 52-week high price of Hindustan Zinc stock is quoting at Rs 807.00 per share (as on 22/05/2024) and 52-week low price is Rs 285.00 per share (as on 15/03/2024), respectively. Hindustan Zinc has a market capitalisation of Rs 3,13,286.28 crore. Hindustan Zinc shares offered return of 81% in last 1-month, gained 146% in last 6-months, and zoomed 150% in last 2-years.

Hindustan Zinc Dividend History: It declared 42 dividends since June 28, 2001. In last 1-year, it declared an equity dividend amounting to Rs 13.00 per share. At the current share price of Rs 741.45 per share, Hindustan Zinc Ltd offers a dividend yield of 3.10%.

Hindustan Zinc Bonus Share History: The Vedanta's subsidiary declared 1 bonus issue since March 7, 2011. The last Bonus that Hindustan Zinc Ltd declared was in the ratio of 1:1 with ex-date set as March 7, 2011.

Hindustan Zinc Stock Split History: It split face value of its share once since March 7, 2011. Hindustan Zinc last split the face value of its shares from Rs 10 to Rs 2 in 2011. The share traded ex-split from March 7, 2011.

Should You Buy Or Sell Hindustan Zinc? Brokerage house Kotak Institutional Equities issued sell call to Hindustan Zinc share with target price of . Kotak Institutional from its report dated May 22, 2024 mentioned the fair price of Hindustan Zinc share as Rs 310.

Hindustan Zinc Ltd About: Hindustan Zinc is India's largest and world's second largest integrated zinc producer. It is the 5th largest silver producers globally with an annual capacity of 800 MT. It is a subsidiary of Vedanta Limited which owns 64.9% stake in the Company while the Government of India retains a 29.5% stake. Hindustan Zinc's operations comprise lead-zinc mines, hydrometallurgical zinc smelters, lead smelters, pyro metallurgical lead-zinc smelter as well as sulphuric acid and captive power plants in northwest India, according to its official website.

Disclaimer:

The stock has been picked from the brokerage report of Kotak Institutional Equities. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.