Hindustan Zinc declares fourth dividend of ₹26; share surges 5%

Shares of Hindustan Zinc rallied nearly 5% in opening trade on Wednesday after Vedanta Group company declared its fourth interim dividend for its shareholders for the financial year 2022-23. The country’s largest zinc miner has declared an interim dividend of ₹26 per equity share, amounting to ₹10,985.83 crore. The interim dividend is 1,300% of the face value of equity share of ₹2 each.

“The record date for the purpose of payment of the fourth interim dividend is March 29, 2023,” Hindustan Zinc said in an exchange filing on Tuesday.

As per the latest shareholding pattern available on the BSE, Vedanta, the promoter of the company, currently owns 64.92% shares in the zinc producer; while the central government holds 29.54% stake in the company. It is notable that Vedanta has pledged 87.6% of its shareholding in Hindustan Zinc as of quarter ending December 31, 2022.

Hindustan Zinc has a strong track record of paying hefty dividends to its shareholders. It has paid 39 dividends since June 28, 2001, while it declared an equity dividend amounting to ₹49.50 per share in the past 12 months, as per Trendlyne data. At Tuesday’s closing price of ₹310.45, this results in a dividend yield of nearly 16%.

Following the dividend announcement, shares of Hindustan Zinc opened 4% higher at ₹322.90 against the previous closing price of ₹310.45 on the BSE. Extending opening gains, the mining stock rose as much as 4.8% to ₹325.25, while the market capitlisation climbed to ₹1.35 lakh crore. On the volume front, total traded shares more than doubled to 2 lakh as compared to the two-week average volume of 1 lakh stocks. In a similar trend, Vedanta shares rose as much as 1.4% to ₹287.65 on the BSE.

Hindustan Zinc shares have delivered over 2% returns in the last one year, while it rose 13.5% in the six-month period. On the year-to-date (YTD) basis, the largecap stock has fallen nearly 2%, while it gained 1% in a month.

For the December quarter of the current fiscal (Q3 FY23), Hindustan Zinc reported a consolidated net profit of ₹2,156 crore, which was down 20% compared to ₹2,701 crore in the year-ago period. On a sequential basis, the profit fell 19% from ₹2,680 crore in the September quarter (Q2FY23). Revenue from operations declined 2% to ₹7,628 crore from ₹7,841 crore in the same quarter last year. On the operating front, EBITDA stood at ₹3,717 crore, down 15% from ₹4,392 crore in the corresponding period last year. The board of the company also declared a third interim dividend of ₹13 per share, amounting to ₹5,493 crore.