Hindustan Zinc Neutral: Target Price Set at Rs 630 by Motilal Oswal
Motilal Oswal Downgrades Hindustan Zinc to Neutral Amid Favorable Commodity Prices
Hindustan Zinc (HZ) reported a strong revenue of INR135 billion for the fourth quarter (4Q) of fiscal year 2026 (FY26), marking a year-over-year (YoY) growth of 49% and a quarter-over-quarter (QoQ) growth of 23%. This performance surpassed the research firm's estimate of INR116 billion.
The company's earnings before interest, taxes, depreciation, and amortization (EBITDA) stood at INR77 billion, representing a YoY growth of 60% and a QoQ growth of 27%. This increase was primarily driven by favorable metal prices and lower production costs. The EBITDA margin for 4QFY26 was 56.9%, up from 55.1% in the previous quarter (3QFY26) and 53% in the corresponding quarter of the previous fiscal year (4QFY25).
Comparison of Hindustan Zinc's EBITDA Growth
Read also: Expert Portfolio Manager Raja Venkatraman Names Top Investment Picks for June 4
| Quarter | EBITDA (INR billion) | YoY Growth | QoQ Growth |
|---|---|---|---|
| 4QFY25 | 53 | - | - |
| 3QFY26 | - | - | - |
| 4QFY26 | 77 | 60% | 27% |
Despite the company's impressive performance, Motilal Oswal's research team believes that the current valuation has already priced in all the positive factors. As a result, they have downgraded their rating to Neutral with a target price (TP) of INR630, premised on an enterprise value-to-EBITDA (EV/EBITDA) multiple of 8.5x for fiscal year 2028 (FY28E). At the current market price (CMP), HZ trades at 7.8x FY28E EV/EBITDA.
Investor Takeaway
Hindustan Zinc's current valuation has priced in all positive factors.
More in Market
Expert Portfolio Manager Raja Venkatraman Names Top Investment Picks for June 4
MarketSmith India's 4 June Stock Recommendations
Foreign Investors Outpace Domestic Mutual Funds in Rupee Returns Despite Record Withdrawal of $27 Billion
