Hindustan Zinc: We anticipated dividends but not this huge, says Jatin Damania of Kotak Securities

Jatin Damania, a research analyst with Kotak Securities, talks to ET Now about the bumper dividend given by Hindustan Zinc and what the future hold for investors and management alike.

Edited excerpts:

Were you expecting that Hindustan Zinc would come out with such a fat dividend or was this dividend in the works?
We were expecting dividend but we were not expecting the dividend in the range of Rs 27.5 because we were expecting something in the range of Rs 20-22 per share because of the huge cash which is lying on the book of Hindustan Zinc.

What about Hindustan Zinc’s other income?

Other income will definitely come down in the next financial year. So that if you look at the cash, the cash is expected to decline by almost 50 odd per cent year on year by the end of FY17 because the dividend payout is on 30th March so definitely the cash proportion will decline by almost 50-53 per cent.

Could this dividend be a precursor to the residual stake sale in Hindustan Zinc?

It is difficult to tell at this point of time but given the government’s holding of almost around 29.5 per cent, we expect if the stake sale does not happen in near future, the higher dividend payout will continue to remain in Hindustan Zinc, the dividend payout will definitely be higher as well healthy in the coming year.