Rs 4,225 crore of dividend announced by Vedanta’s flagship company; government owns 29.5 per cent stake in the company!

In FY24, the company achieved its second-highest annual consolidated revenue, this was accompanied by the second-highest annual EBITDA.

The company's Board of Directors has approved an interim dividend for FY25, amounting to Rs 10 per equity share, which represents 500 per cent of the face value of Rs 2 per equity share. This interim dividend totals Rs 4,225.32 crores.

The Government, which also holds a 29.5 per cent stake in Hindustan Zinc, will also receive a payout of Rs 1,247 crore. The Record date for the interim dividend has been fixed as May 15, 2024.

Also read Ace Investor Shankar Sharma purchased 3.65 lakh shares in this small sized company; Promoters increased their stakes in Q4 FY24

Q4 FY24 Performance

As per the Quarterly Results of Q4 FY24, the company witnessed a steady performance. Consolidated revenue remained constant quarter-on-quarter at Rs 34,937 crore. However, there was a 3 per cent increase in consolidated EBITDA, reaching Rs 8,969 crore, with an EBITDA margin of approximately 30 per cent. Profit after tax (excluding exceptional items) stood at Rs 2,453 crore.

The company demonstrated a strong double-digit return on capital employed, showing improvement compared to the previous quarter, at around 23 per cent. Notably, there was an enhancement in net debt to EBITDA ratio, which improved to approximately 1.5x compared to 1.7x in December 2023.

Net debt decreased by 10 per cent quarter-on-quarter, totaling Rs 56,338 crore. Liquidity also saw a notable improvement, increasing by 21 per cent quarter-on-quarter, with robust cash and cash equivalents amounting to Rs 15,421 crore.

FY24 Performance

In FY24, the company achieved its second-highest annual consolidated revenue, reaching Rs 141,793 crore. This was accompanied by the second-highest annual EBITDA of Rs 36,455 crore, marking a 3 per cent increase. Notably, the EBITDA margin improved to 30 per cent, rising by approximately 240 basis points.

The company also saw a robust double-digit return on capital employed of around 23 per cent, demonstrating an increase of approximately 240 basis points year-on-year. Moreover, a successful liability management exercise at the Holding Company resulted in a structural enhancement in the capital structure.

Additionally, the company boasted its highest dividend yield of approximately 17 per cent per annum (based on a 5-year average), which is 10 times higher than the Nifty 50 companies. In FY24, dividends amounting to Rs 18,572 crore were paid out.

Operational Highlights FY24:

In the operational highlights for FY24, key business sectors have maintained robust performance.

• In the aluminum division, there has been a record-breaking annual production of cast metal, reaching 2,370 kt, marking a 3 per cent increase year-on-year.
• In Zinc India, Hindustan Zinc has ascended to become the third-largest global producer of silver.
• Moreover, the company has achieved 5 consecutive quarters of cost optimization, culminating in the lowest zinc production cost over the last three years, amounting to USD 1,051/t in 4QFY24.

The company’s shares closed the day at Rs 445.85 per share on the BSE. Additionally, the shares of the company have delivered an impressive return of 41.25 per cent in the past three months.

Business Overview

Incorporated in 1966, Hindustan Zinc in Zinc-Lead and Silver business is the world’s 2nd largest integrated Zinc producer and now the 3rd largest silver producer. The company has a market share of around 75 per cent of the growing Zinc market in India with its headquarters at Zinc City, Udaipur along with Zinc-Lead mines and smelting complexes spread across the state of Rajasthan.

Investors must keep this Large-Cap stock on their radar as it has the potential to deliver multibagger returns.

Disclaimer: The article is for informational purposes only and not investment advice.