Metal Stocks Outlook for the week – 21 to 25.07.2014
(www.rupeedesk.in)
(www.rupeedesk.in)
Stocks of metal companies are seen
rising next week due to an underlying positive bias,
with Sesa Sterlite's subsidiary
Hindustan Zinc in focus as it will detail its Apr-Jun
earnings on Monday. The possibility
of a decline in steel prices was low going ahead,
and in fact the trend of gradual
increase in prices of base metals will continue.
In the last 14 days, aluminium gained
5%, zinc rose 4% and lead and copper rose 2%
and 1% respectively. Hindustan Zinc's
Apr-Jun net profit at 16.37 bln rupees, down 1%
year-on-year, and net sales at 30.98
bln rupees, up 5% year on year. We expect
integrated zinc sales for Q1FY15 at
~150,000 tonne (lower by 12.3% YoY) with
integrated lead sales volumes at
27,750 tonne (lower by 7.5% YoY) and silver sales at
~77700 kg (lower by 15.5% YoY). On
the back of higher operating costs, we expect EBITDA margins to drop 430
bps QoQ to 47.8%.
