HINDZINC - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 4.1
| Stock Code | HINDZINC | Market Cap | 2,70,061 Cr. | Current Price | 639 ₹ | High / Low | 733 ₹ |
| Stock P/E | 23.1 | Book Value | 32.2 ₹ | Dividend Yield | 4.54 % | ROCE | 60.7 % |
| ROE | 72.4 % | Face Value | 2.00 ₹ | DMA 50 | 604 ₹ | DMA 200 | 517 ₹ |
| Chg in FII Hold | 0.22 % | Chg in DII Hold | -0.24 % | PAT Qtr | 3,860 Cr. | PAT Prev Qtr | 2,632 Cr. |
| RSI | 50.8 | MACD | 9.62 | Volume | 1,17,65,288 | Avg Vol 1Wk | 3,96,85,127 |
| Low price | 378 ₹ | High price | 733 ₹ | PEG Ratio | 9.04 | Debt to equity | 0.82 |
| 52w Index | 73.6 % | Qtr Profit Var | 45.8 % | EPS | 27.7 ₹ | Industry PE | 49.8 |
📊 Analysis: Hindustan Zinc (HINDZINC) demonstrates exceptional profitability with ROE (72.4%) and ROCE (60.7%), supported by strong quarterly PAT growth (+45.8%). Dividend yield (4.54%) provides attractive income support. Valuations are reasonable with a P/E of 23.1 compared to industry average of 49.8, making the stock relatively undervalued. However, PEG ratio (9.04) signals expensive growth expectations, and debt-to-equity (0.82) is higher than ideal. Current price (₹639) is above both 50 DMA (₹604) and 200 DMA (₹517), reflecting bullish momentum. RSI (50.8) indicates neutral conditions, while MACD (9.62) shows positive sentiment. The ideal entry zone lies between ₹600–₹620 for long-term investors. If already holding, maintain positions for 3–5 years, leveraging strong fundamentals and dividends, but consider partial profit booking near ₹720–₹730 resistance levels.
✅ Positive
- Exceptional ROE (72.4%) and ROCE (60.7%) highlight superior capital efficiency.
- Dividend yield (4.54%) provides strong income support.
- Quarterly PAT growth (₹3,860 Cr vs ₹2,632 Cr) shows robust earnings momentum.
- FII holdings increased (+0.22%), reflecting foreign investor confidence.
⚠️ Limitation
- PEG ratio (9.04) signals overvaluation relative to growth.
- Debt-to-equity ratio (0.82) is higher than ideal for a mining company.
- DII holdings decreased (-0.24%), showing cautious domestic sentiment.
📉 Company Negative News
- Decline in DII stake, reflecting reduced domestic institutional confidence.
- High PEG ratio suggests growth expectations may be priced in.
📈 Company Positive News
- EPS at ₹27.7 reflects a strong earnings base.
- MACD (9.62) indicates bullish momentum in near term.
- Strong market cap (₹2.70 lakh Cr) reflects industry leadership.
🏭 Industry
- Metals and mining sector benefits from rising infrastructure and industrial demand.
- Industry PE (49.8) is much higher than HINDZINC, making the stock relatively undervalued.
🔎 Conclusion
HINDZINC is a fundamentally strong company with exceptional profitability and attractive dividend yield, making it a solid candidate for long-term investment. Ideal entry is around ₹600–₹620. Existing holders should maintain positions for 3–5 years, leveraging dividends and growth, while booking profits near ₹720–₹730 resistance levels.
Would you like me to extend this with a peer benchmarking overlay (Vedanta, Hindalco, NALCO) so you can compare Hindustan Zinc’s valuation and profitability against its closest metals peers?