Hindustan Zinc Q3 Result: Stock surges to day's high after strong operating performance

Shares of Hindustan Zinc Ltd., a subsidiary of Vedanta Ltd. surged to the highs of the day on Monday, January 19, in response to the quarterly results reported by the company for the October-December period.

Net profit for the period grew by 47% from the same quarter last year to ₹3,879 crore from ₹2,647 crore. Profitability was also aided by a 33% increase in other income.

Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the quarter stood at ₹6,005 crore, higher than the CNBC-TV18 poll of ₹5,614 crore. On a year-on-year basis, Hindustan Zinc's EBITDA increased by 34.7%.

EBITDA margin for the quarter expanded by 300 basis points to 55% from 52% last year. The margin figure was also in-line with the CNBC-TV18 poll estimate of 54.9%.

In its business update shared earlier, Hindustan Zinc's saleable metal production increased by 4% from last year to 270 kt, while Silver production was down 1% year-on-year to 158 tonnes from 160 tonnes earlier.

Although Silver prices are trading higher in the global markets, these higher prices are partially offset by hedged quantities.

Shares of Hindustan Zinc are trading 3.7% higher after the results announcement at ₹661.1. The stock is up 43% in the last 12 months. It must be noted that Hindustan Zinc has very little free float in the market, as the company is mostly owned by promoter Vedanta, and public shareholders including the Government of India, and Mutual Funds.