Hindustan Zinc share surges over 5% on dividend announcement; brokerage says valuation expensive, slashes target price

Shares of Hindustan Zinc surged over five per cent in Thursday's intraday trade after the board of directors of the company approved an interim dividend of Rs 21 per equity share on Wednesday.  

"We wish to inform you that the Board of Directors of the Company through resolution passed by circulation on Wednesday, July 13, 2022 have approved Interim Dividend of ~ 21 per equity share i.e. 1050% on face value of~ 2/- per share for the Financial Year 2022-23 amounting to~ 8873.17 Crores," said Hindustan Zinc in a regulatory filing.  

The record date for the purpose of payment of interim has been fixed as July 21, 2022. "The interim dividend will be paid within stipulated timelines as prescribed under law," said the company. 

Meanwhile, global brokerage house CITI slashed the target price of the stock from Rs 330 to Rs 255. It believes though the dividend announcement is good, stock can undergo more correction in the next 90 days. The stock has already corrected around 14% this year so far. Saying at current market price, the stock is a little expensive, the brokerage maintained a neutral rating on the counter.  

Hindustan Zinc Limited, a subsidiary of Vedanta Limited, is an Indian integrated mining and resources producer of zinc, lead, silver and cadmium. It is a subsidiary of Vedanta Limited.