Shares of Hindustan Zinc rose sharply in Wednesday’s trade after declaring an interim dividend of Rs 26 per share. The stock surged 4.77 per cent to hit a day high of Rs 325.25 over its previous close of Rs 310.45. The company board has approved a fourth interim dividend of Rs 26 per equity share for the current fiscal (2022-23). The dividend of Rs 26 for each share with a Rs 2 face value would lead to an outgo of Rs 10,986 crore. The record date for the dividend payment is March 29. In total, the company has declared an add-up dividend of Rs 75.50 apiece for this fiscal year, amounting to Rs 32,000 crore.
On the earnings front, Vedanta’s subsidiary reported a profit of Rs 2,157 crore for the December 2022 quarter (Q3 FY23), 20.14 per cent lower than a profit of Rs 2,701 crore posted in the same period a year ago.
Support on the counter could be seen at Rs 318, an analyst said, while another suggested that Hindustan Zinc looked ‘weak’.
Ganesh Dongre, Senior Manager – Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, “The stock has corrected sharply from its one-year high of Rs 383, hit on January 19 this year. On the weekly technical charts, it has formed a bullish hammer pattern which is bullish in nature for the short term. So, traders can buy this stock with a stop loss of Rs 285-290 for the target price of Rs 350.”
Ravi Singhal, CEO, GCL, said, “Hindustan Zinc looks weak from here. After this dividend, almost all cash reserves are out now from the company. If the commodities cycle turns around then debt can increase. While on other hand, the government will also try to sell its stake because all the company’s cash is mostly out.”
Singhal lowered his target price to Rs 280.
AR Ramachandran from Tips2trades said, “Hindustan Zinc looks bearish on the daily charts with strong resistance at Rs 324. A daily close below the support of Rs 318 could lead to targets of Rs 304-296 in the near term.”
Kotak Institutional Equities has given a ‘Sell’ call on the counter while pegging it at Rs 270.
Vedanta holds a 64.92 per cent stake in Hindustan Zinc, which is an integrated producer of zinc, lead and silver. The Rajasthan-based company has long been a cash cow for Anil Agarwal’s Vedanta Group, squeezing out rich dividends.
Last month, the Centre had opposed Vedanta’s proposal to sell its international zinc business to Hindustan Zinc for $2.98 billion over concerns of valuation.
Meanwhile, Indian equity benchmarks traded higher in afternoon deals, led by gains in state-owned lenders, financials and pharma stocks.
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