Hindustan Zinc Reports Positive Financial Performance in Q1 FY25, Stock Call 'Hold'

Hindustan Zinc, a largecap company in the non-ferrous metal industry, has recently announced its financial results for the quarter ending June 2024. According to MarketsMOJO, the stock call for Hindustan Zinc is ‘Hold’.

The company has shown a positive financial performance in the quarter, with a score improvement from -5 to 7 in the last three months. This can be attributed to several factors, such as the company’s high operating profit to interest ratio, which is the highest in the last five quarters at 15.41 times. This indicates that the company is effectively managing its interest payments.

Furthermore, the company’s operating profit margin has also shown improvement, reaching its highest at 48.54% and growing each quarter in the last five quarters. This reflects the company’s efficiency in managing its operations.

In terms of sales, Hindustan Zinc has recorded its highest net sales of Rs 8,130.00 crore in the last five quarters, indicating a positive trend in the near term. The company’s operating profit (PBDIT) has also shown a positive trend, reaching its highest at Rs 3,946.00 crore in the last five quarters.

The company’s profit before tax (PBT) has also seen a positive trend, with its highest at Rs 2,846.00 crore in the last five quarters. This is a growth of 23.3% over the average PBT of the previous four quarters. Similarly, the profit after tax (PAT) has also shown a positive trend, with its highest at Rs 2,345.00 crore in the last five quarters, a growth of 20.9% over the average PAT of the previous four quarters.

On the other hand, there are some areas that need improvement for Hindustan Zinc. The interest cost has increased by 21.57% over the preceding nine months period, indicating a rise in borrowings. The company’s cash and cash equivalents have also decreased, reaching its lowest at Rs 173.00 crore in the last six half yearly periods, indicating a deterioration in short-term liquidity.

In terms of dividends, Hindustan Zinc has distributed a lower dividend per share (DPS) of Rs 13.00 in the last five years, and the dividend payout ratio (DPR) has also decreased to its lowest at 70.53% in the last five years. This indicates that the company is distributing a lower proportion of its profits as dividends.

Overall, Hindustan Zinc has shown a positive financial performance in the quarter ending June 2024, with some areas that need improvement. Investors are advised to hold their stocks in the company, as per MarketsMOJO’s recommendation.