While the linkage component may see Hindustan Zinc’s blended cost moderate, the increase in the base commodity prices could see its costs rise. Since 17 January, the Hindustan Zinc Ltd (HZL) stock has fallen 9% even as zinc prices have remained firm. Refined zinc output declined by 2.4% over a year ago due to lower ore grades and lower open cast mine output. The current investor concern is that at a time of firm zinc prices, the company’s profitability is slipping. For investors to regain confidence, they would want to see zinc prices rise even further or for HZL’s costs to moderate.

Source: Mint January 23, 2018 02:37 UTC