Hind Zinc Q2 net profit falls 6.7%
Shares of Hindustan Zinc rose 4% on Wednesday even as reported slightly disappointing earnings performance for the July-September quarter. Higher dividend along with improved outlook has nudged investors confidence in the metal miner.
The Vedanta group company reported a 6.7% drop in net profit to Rs 1,940 crore for the quarter ended on September 30, 2020, due to high expenses. It had posted a net profit of Rs 2,081 crore in the year-ago period.
The price of zinc was down one per cent at $2335 a tonne and lead slipped eight per cent to $1873 a tonne. However, silver was up 43% to $24.26 an ounce while rupee depreciated six per cent to 74.24 against the dollar in the quarter under review.
It raised Rs 5,020 crore through non-convertible debenture and Ts 4,778 crore via short-term commercial paper. Following this, the net cash available with the company has come down to Rs 17,833 crore, against Rs 27,631 crore.
Hindustan Zinc declared highest interim dividend in 12 years, days after the failed delisting offer of its parent, Vedanta. The subsidiary announced a dividend of Rs 21.3 per share—implying a dividend yield of 9.5% to its closing price as on October 20, according to a company filing with the stock exchange. The record date for paying the dividend is October 28.
Hindustan Zinc had paid a higher dividend of Rs 30 per share in July 2008.
Vedanta, which holds 64.92% stake in Hindustan Zinc, is expected to get nearly Rs 5,842.8 crore of the total interim dividend of Rs 9,000 crore, but it’s not clear if the same will be passed through to Vedanta’s shareholders. The metal major has yet to distribute the dividend it received from its subsidiary in the quarter ended March.
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