Buy Hindustan Zinc, target of Rs 830

Keep Hindustan Zinc to buy with a target price of Rs 830. The company has reported a 16.6% YoY decline in topline to Rs 16,436 million and a 31.9% YoY fall in operating profit to Rs 9,777 million during Q1FY2009. Considering that LME zinc prices were lower by 42% YoY, the decline in sales and profit does not come as a surprise. In fact, the company has managed to offset the impact of lower LME prices through volume growth to some extent. The first quarter profit of Rs 8,478 million is 30% of our full year estimate for FY2009E.