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Systematix Research Report
Hindustan Zinc Ltd.'s Q4 FY23 Ebitda of Rs 42.5 billion -14.2/+14.8% YoY/QoQ was 2% above our estimates. At 215 thousand tonne, zinc volumes were +1.9/+2.4% YoY/QoQ.
Zinc/lead prices averaged at $3,124/tonne (-16.8%/+4% YoY/QoQ) and $2,140/tonne (-8.4%/+2% YoY/QoQ), respectively during the quarter. Silver prices averaged $22.6/ounce and were -5.8/+6.6% YoY/QoQ. Before royalty, zinc's cost of production was $1,214/tonne, +6.9%/-6.1% YoY/QoQ.
Management has set FY24 guidance of 1.05-1.075 million tonne of mined metal production (Zinc plus lead metal), implying a 1.8% to 4.3% YoY growth, and 725-750 tonne of silver production (1.5%-5% YoY). Zinc cost of production guidance is set at $1,125-1,175/t (-9% to -10%/YoY).
We have factored in mined metal production at 1.06 mt (+2.9% YoY) and silver production at 743 tonne (+4.1% YoY) for FY24.
We revise our FY24E zinc price assumption downward by 9%, and factor in the impact of brand fee-related payments at 2% of topline, and lower energy-related costs. As a result, we have revised our FY24E/25E Ebitda by -10%/- 8%, respectively.
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