Shares of Hindustan Zinc dropped 9.8 percent on Friday, January 20, after the company reported a 20.2 percent decline in the consolidated net profit to ₹2,156 crore from ₹2,701 crore recorded in Q3 FY22.
During Friday’s trade, the stock opened at a price of Rs. 345 per share against the previous closing price of Rs. 377.55 per share and slipped further during the early trading session to touch an intraday low of Rs. 340.20.
It was trading at ₹351.75, down by 6.83 percent, at 11:30 a.m. on the NSE.
At the current level, the stock is trading over 45 percent above its 52-week low of Rs. 242.05 hit on July 06, 2022.
The stock has grown over 7 percent in the last one month. In the past six months, it has given a positive return of nearly 26 percent. Furthermore, the stock has gained almost 9 percent in the last one year.
On Thursday, Anil Agarwal-promoted Vedanta's board approved selling Zinc International assets to Hindustan Zinc for $2,981 million.
“The assets held THLZV through THL Zinc Ltd (Mauritius) comprising shares held in Black Mountain Mining Pty Ltd, South Africa (69.6 per cent) and THL Zinc Namibia Holdings (Pty) Ltd (100 per cent), Namibia, will be sold to the proposed wholly-owned subsidiary (SPV) of Hindustan Zinc Ltd (HZL) for a cash consideration not exceeding USD 2,981 million,” Vedanta said in a filing.
“The proposed transaction will unlock value, monetise the said zinc assets and create substantial synergies for both THLZ and HZL,” it added.
In Q3, the company's revenue from operations fell 2.71 percent YoY to ₹7,628 crore from ₹7,841 crore in the corresponding quarter of the previous financial year. Earnings before interest, taxes, depreciation and amortization (EBITDA) fell 15.2 percent to ₹3,707 crore.
The drop in revenue was on account of lower LME coinciding with lower refined metal and silver volumes partially offset by favourable exchange rates and gains from strategic hedging. Power and fuel costs at around ₹1000 crore were up by 43 percent YoY and 2 percent QoQ.
“Hindustan Zinc delivered the best-ever 9 months refined metal on the back of the highest-ever mined metal. In FY22, we reached the one million tonnes mined metal landmark, and this year with the current run-rate, we are confident of achieving the one million tonnes refined metal mark and are fully geared to deliver another stellar annual performance," said Arun Misra, CEO of the company.
The company has also declared an interim dividend of ₹13 per share for the financial year 2022-2023. The dividend will amount to about ₹5,493 crore.
The company has fixed January 30 as the record date for the purpose of payment of a third interim dividend to eligible shareholders.
The company operates through two segments: zinc, lead, silver & others, and wind energy. The company has a rock phosphate mine in Matoon, near Udaipur in Rajasthan and zinc, lead, silver processing and refining facilities in the state of Uttarakhand.