Hindustan Zinc shares gain as firm announces 300% dividend for FY24

Shares of Hindustan Zinc Limited (HZL) rallied up to 2% in Wednesday's trade after the zinc mining major's board approved a second interim dividend for the current financial year 2023-24. At 9:47 am, the scrip was trading 1.86% higher at ₹331.05 apiece on the NSE.

The Anil Agarwal-led company has announced a dividend of ₹6 per equity share or 300% on the face value of ₹2 per share for FY24, amounting to ₹2,535.19 crore.

The record date for the said dividend, if any, has been fixed as December 14, 2023, the company said in a regulatory filing.

A record date means shareholders who own shares of the company at that particular date will be eligible for the dividend payout.

Earlier, Hindustan Zinc had announced its first interim dividend of ₹21 per share in July 2022. For the financial year 2023, the company has declared a total dividend of ₹79.5.

As per the shareholding pattern in the September quarter, Vedanta holds a 64.92% stake in Hindustan Zinc, most of which is pledged. HZL's former owner the Government of India has a stake of 29.5% at present.

The mining giant's net profit declined 35.5% year-on-year (YoY) for the second-quarter, primarily on account of lower EBITDA partly offset by lower tax expense.

Revenue from operations also decreased to ₹6,619 crore, down 18.5% YoY, on account of significantly lower zinc prices, lower zinc and silver volumes and differential strategic hedging impact partly offset by higher lead and silver prices and favourable exchange rates.

Shares of Hindustan Zinc have underperformed the Nifty Metal index since the beginning of this year. The stock has risen 0.20% so far this year as against a 7.79% gain in the Nifty Metal index.

In terms of technicals, the relative strength index (RSI) of HZL stands at 71.8, signaling the stock is overbought. This implies that stock may show pullback.

The stock has a one-year beta of 0.5, indicating very low volatility during the same period. Hindustan Zinc shares are trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

A subsidiary of mining giant Vedanta Limited, Hindustan Zinc is an integrated producer of zinc, lead and silver. With large volumes of metal ores being mined out of its Rajasthan-based mines, it is the world's second-largest zinc producer and the fifth-largest producer of silver globally.