Hindustan Zinc Ltd is now under the spotlight as we give it a ‘Buy’ rating with a target of ₹564, which is quite a jump from its current price of ₹442.40. Being the world’s largest integrated zinc producer and one of the top 5 silver producers globally, Hindustan Zinc has proven itself as a major player in the market. With their focus on reducing production costs and expanding their metal production capacity, the company aims to increase its silver production capacity from 800 tpa to 1,500 tpa by FY30. They also plan to lower zinc production costs to below $1,000 per tons to boost profitability. A techno-commercial study is in progress to double production to ~2 mtpa levels in the long term, which will drive steady top-line growth through incremental volumes.
Positioned with a 70-80% market share in the Indian zinc market, Hindustan Zinc is in a prime position to capitalize on the global zinc and lead market balance, which is expected to remain in marginal surplus in CY25. The company’s focus on operational efficiency, capacity expansion, and cost optimization initiatives make it a pure play in the industry. With projected Revenue/EBITDA/PAT CAGR of 4/8.4/7 per cent over FY25-27E, Hindustan Zinc is set to continue its growth trajectory. Not really sure why this matters, but it seems like Hindustan Zinc is on the right track to solidify its position in the market and drive further growth.
As Hindustan Zinc sets its sights on expanding its production capacity and reducing costs, the company is laying the groundwork for a successful future. With plans to increase silver production capacity and decrease zinc production costs, Hindustan Zinc is taking strategic steps to improve its profitability. The ongoing techno-commercial study to double production levels in the long term shows the company’s commitment to growth and sustainability. Maybe it’s just me, but it feels like Hindustan Zinc is making all the right moves to secure its position as a key player in the global metal market. With a focus on operational efficiency and capacity expansion, the company is well-positioned to capitalize on market trends and drive top-line growth.