21 May , 2024 By : Debdeep Gupta
Shares of Hindustan Zinc zoomed over 14 percent on May 21, extending gains for the fifth straight session. Indian metals stocks have been rallying significantly, driven by expectations that the sharp rise in metal prices will enhance company margins.
Additionally, with stable production costs and higher selling prices, increased profits per unit sold are anticipated.
Prices of Industrial metal including copper, aluminum, zinc, and lead, have surged lately due to supply concerns and optimistic long-term demand, sparking a new wave of speculative buying.
Although metal prices have been steadily rising in 2024, traders have also received a significant boost after China recently announced measures to support its crisis-hit property sector.
Metals have also rallied amid expectations that the US Federal Reserve might implement a rate cut by September. Investors will be closely monitoring the minutes from the Fed's last policy meeting, set to be released this week, along with comments from various Fed officials.
Vedanta group firm Hindustan Zinc saw a 21 percent year-on-year decline in fourth-quarter net profit at Rs 2,038 crore due to global zinc price depression amidst slower demand growth as compared to supply. Quarterly revenue dropped 12 percent to Rs 7,285 crore, while EBITDA fell 14 percent to Rs 3,637 crore.
Lower zinc and lead prices and reduced lead volume contributed to the decline, partly offset by higher zinc & silver volumes, silver prices, and favorable exchange rates.
At 1:34 pm, Hindustan Zinc shares were trading nearly 14 percent higher at Rs 704.80 apiece on NSE. The firm's market capitalization surged to over Rs 2.97 lakh crore.
So far this year, the stock has delivered multi-bagger returns of 121 percent. In comparison, the Nifty metal index has risen 24 percent and the Nifty 50 index has risen 3.7 percent during this period.
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