Hind Zinc

It is a 64.92% subsidiary of Vedanta Group's Sterlite Industries and is India's largest and world's second largest integrated producer of zinc and lead, with a global market share of 6% in zinc. Being one of the lowest cost producers in the world, the company has 4 mines in Rajasthan, 4 smelting operations (3 in Rajasthan, 1 in Andhra Pradesh) and captive power plant. Its product portfolio includes refined zinc metal, refined lead metal, silver, cadmium and sulphuric acid. For Q3FY13, the company has posted another set of very good numbers, with net sales, on YoY rising 14% at Rs.3140 crore and net profit came in at Rs.1612 crore, up 26%. What really helped, apart from the higher topline was higher revenues from silver business, increase in other income and decline in tax outgo. Its substantial other income comes from cash deposited in the banks. As at 31st Dec 2012, it held Rs.19.282 crore as cash and cash equivalents. And it remains debt free. Silver remained its star performer, with production going up 103% at 117 tonnes and higher prices helped it post a 2.5 times growth in topline. On the other hand, its main fray., lead and zinc remained flat due to volatile prices on LME though production of lead was up 11%.

Looking ahead, for FY13, management has guided silver production to be at 350 tonnes. It expects overall mined metal production for the entire year to be higher than the previous year. Its expansion at its underground mines at RampuraAgucha and Kayar which can give zinc, lead and silver, are expected to on stream by FY14 and that will become a big earning booster. It will be embarking on the next phase of its growth plan to increase mined metal production capacity to 1.2 million tonnes per annum (MTPA), involving a capex of $1.5 billion in 6 years. This comprises of developing a 3.75 MTPA underground mine at RampuraAgucha, expanding SindesarKhurd mine from 2 MTPA to 3.75 MTPA and expanding Zawar mines from 1.2 MTPA to 5 MTPA. The growth plan is expected to increase mined metal (MIC) production capacity to 1.2 MTPA. This will have a capex of $1.5 billion, of which an average of $250 million will be spent every year, over next 6 years.

The company till end of 9MFY13 had posted a net profit at Rs.4734 crore as against Rs.5526 crore in FY12. It is expected to end FY13 with a net profit at Rs.6000 crore and expected EPS of around Rs.14.