Why Hindustan Zinc Share Price is Falling

Indian share markets have been in a downward trajectory off late on the back of a global banking crisis and concerns over the inflation trajectory.

As a result, the Sensex is down by 1.9% while the Nifty is down by 1.8%.

Shares of many companies have also felt the heat. One such stock is Hindustan Zinc.

Here's why the company's shares have fallen in the last few days.

Stock turns ex-dividend

Shares of Hindustan Zinc crashed 10% as the stock traded ex-dividend on 29 March 2023.

The company paid its fourth interim dividend of Rs 26 per equity share i.e. 1,300% on the face value of Rs 2 per share for the financial year 2023, amounting to Rs 109.9 bn.

The record date for the payment was 29 March 2023.

The ex-dividend date is the day the stock starts trading without the value of its next dividend payment, which is usually one day before the record date.

This means that an investor who buys the stock on its ex-dividend date or later will not be eligible to receive the declared dividend. Only investors who own the stock on the day before the ex-dividend date are eligible to receive the declared dividends.

With this, Hindustan Zinc has paid dividends worth Rs 320 bn in the financial year 2023. It announced a total dividend of Rs 18 per share, amounting to Rs 76 bn in the financial year 2022.

It paid Rs 21.30 per share as dividends in the financial year 2021, totalling Rs 90 bn.

Vedanta holds a 64.9% stake in Hindustan Zinc, as of 31 December 2022. The dividend announced would help promoter Vedanta fetch Rs 71.3 bn.

Lower volumes lead to decline in net profit

Hindustan Zinc reported a marginal decline in revenue for the December 2022 quarter at Rs 76.3 bn. The company's revenue stood at Rs 78.4 bn in the same period last year.

The fall in revenue was on account of lower LME coinciding with lower refined metal and silver volumes, partially offset by favourable exchange rates and gains from strategic hedging.

Due to the decline in revenue, the company's operating profit fell 15% YoY to Rs 37.2 bn from Rs 43.9 bn in the December 2021 quarter.

Overall, the company's net profit fell 20% YoY to Rs 21.6 bn from Rs 27 bn in the year-ago period.

How Hindustan Zinc shares have performed recently

Hindustan Zinc shares have declined by more than 4% in a month. Over the past week, the company's shares are trading lower by 8%.

So far in 2023, shares of the company have eroded over 8%. However, the stock has risen over 100% in the past three years.

Hindustan Zinc touched its 52-week high of Rs 383 on 19 January 2022 while it touched a 52-week low of Rs 242 on 6 July 2022.

About Hindustan Zinc

Incorporated in 1966, Hindustan Zinc has a rich experience of more than five decades in zinc-lead mining and smelting.

The company is one of the lowest cost producers of zinc globally and is India's only Integrated producer of zinc, lead, and silver.

It is a subsidiary of Vedanta Limited which owns 64.9% stake in it. The balance 29.5% stake is owned by Government of India.

To know more about the company, check out Hindustan Zinc company fact sheet and Hindustan Zinc's quarterly results.

You can also compare Hindustan Zinc with its peers on our website.

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